Economic conditions, advancement of technology and other reasons have caused that the electric industry with a vertical structure to be replaced by a deregulated and restructuring industry. In the new structure for a more competitive market, transmission costs allocation are preformed based on the use of system facilities. In the other hand, transmission loss compensation is most important as a market ancillary service and its cost allocation is an interesting problem in competitive power market. In this thesis, user's share from transmission costs and active power loss is determined on the basis of the actual use of the transmission network. Here, a new method of active power tracing is proposed based on the actual operation of the power system. In this method user's share on lines active flow, using conversion of load model and identification of active power transmission path, based on conventional electrical circuits equations is determined. Special advantage of the proposed method is the determination of user's share on lines loss with active power tracing, simultaneously in a power system. In other words, transmission cost and loss allocation are performed using only one algorithm. This method is applied to two different test networks and the results are compared with some other tracing methods. Numerical results show that the proposed tracing method is effective in the creation of correct economic signals towards an efficient use, in today's competitive power market.