  Distribution locational marginal pricing (DLMP) can adversely affect users in
a grid-constrained transactive distribution system market (DSM) that are at a
distance away from the substation, requiring longer paths to connect to the
substation. When the grid operates closer to its physical limits in terms of
line capacities and voltage deviations, these users are more likely to cause
grid violations than others in the vicinity of the substation. Conversely,
increased energy consumption by users near the substation can choke off the
supply to those at the grid s extremities. This research describes a novel
mechanism to charge users in a more equitable manner, by regularizing the
distribution system operator (DSO)s social welfare based objective function
with a fairness criterion. The Jains index of fairness is used in this context
and corresponding fairness DLMP component is derived. The overall problem
entails the maximization of the regularized objective within a set of linear
constraints. The constraints that ensure that the grids voltage and line power
limits are not violated. Constrained optimization is carried out in an
iterative manner through dual decomposition where the dual variables and unit
costs are incrementally updated by the DSO using the augmented Lagrangian
method (ALM). Simulations reported in this study confirm the effectiveness of
the proposed approach.
