Under deregulated environments, transmission system is playing an increasingly vital role in the modern power markets. Despite the widespread experience of electricity restructuring during the past decade, important issues remain open about the best way to organize transmission to support reliability management and market trading. In the absence of an appropriate mechanism for the transmission services unbundling, it is unlikely to take into consideration the effects of power flows that diverge from the contract path. When individuals do not confront the respective responsibility for the transmission services, the market outcome will be inefficient. Allocations of transmission loss and costs to the market participants are essential for the transmission services unbundling. In this respect, two methods are proposed in this dissertation to provide technical and economical signals for the allocations. Based on circuit theory, the first method proposes a new procedure to trace the power flows on the transmission lines. Starting with the computation of an individual generator¡¦s or load¡¦s contributions to the line currents, the network is then decomposed into different networks. In each decomposed network, bus injections and line power flows are replaced by components related to only one generator or load. Based on the components of real power flow on the transmission lines, the allocations of transmission loss and supplementary cost can be easily performed. In the second method, AC power flow based injection shift distribution factors (ISDFs) are exploited for calculating generalized generation distribution factors (GGDFs) and generalized load distribution factors (GLDFs). GGDFs and GLDFs can be used to derive the components of the real powers on each transmission line contributed by the generators and loads. Three bus-oriented schemes are proposed to allocate the transmission loss. They are aimed to reduce the number of distribution factor computation and to reflect the activity in a competitive market. The reactive powers incurred on transmission lines due to the generators and loads are also derived using the reactive power distribution factors (RPDFs). Based on the components of complex power flow on the transmission lines, transmission cost allocation methods are proposed to charge the impacts of power transactions on the network. In order to take the service reliability into account the service charges consist of the components representing normal and the contingency states respectively.