This paper proposes a systematic method to allocate the power flow and loss for deregulated transmission systems. The proposed method is developed based on the basic circuit theories, equivalent current injection and equivalent impedance. Four steps are used to trace the voltages, currents, power flows, and losses contributed by each generator sequentially. Using this method, the real and reactive power on each transmission lines and their sources and destinations can be calculated. The loss allocation of each line, which is produced by each generator, can also be obtained. Test results show that the proposed method can satisfy the power flow equation, the power balance equation and the basic circuit theories. Comparisons with previous methods are also provided to demonstrate the contributions of the proposed method. (c) 2005 Elsevier Ltd. All fights reserved.