Economical concerns, technological advancements and changing of political attitude throughout the world cause to convert the electricity from a monopole structure to a deregulated and restructured industry. Regarding to this matter, competitive environment for supplying the system loads come into exist among the power suppliers. Transmission system has a great importance in the contracts of power exchanging through the market. The mentioned conditions enhance the importance of diagnosing real path of power. Financial regulations perform the agreements between system operators and the first question arises in this area is that which suppliers provide required power for a certain load and which transmission lines are included in the feeding path? Determining the contribution of system loads and generators in the power flowing through the lines, the contribution of these elements in system losses, electricity pricing and transmission cost allocation are common studies in economic operation of power systems. Feasible solutions to these problems and calculations can be achieved by solving the power tracing problem. The power tracing problem has been solved so far by many analytical and simulatio methods, including: the Bialek method, the Graph Theory based methods, methods based on Incidence and matrix and Admittance matrix, the Complex Power Flow Tracing method, the method of Distribution Factor and Modified Topological Generation and Load Distribution Factor method, and so on. These methods are generally based on the not provable proportional sharing principle and are not accurate. The proposed method offered in this thesis is based on the exact principals of the circuit theory and superposition principle and accurate load flow calculations and real operation of the power system. By the proposed method, connections between various buses are determined first. This is established by a connection matrix indicating the named components connecting various system buses determined by AC power flow calculations and labeling the system lines. According to the discrete Markov’s chain it is amenable to achieve the stable relation of system buses by multiplying the connection matrix by itself several times based on Boolean algebra rules till the multiplication is ineffective. The resulting matrix is called path matrix. Then domains, transmission line types, real path of power transmission and the contribution of system operators in power flowing through the system are determined by converting the system loads model and using the path matrix and super position principle. One of the advantages of the proposed method is the capability of determining the contribution of system operators in transmission losses, beside the power tracing problem simultaneously, by the same algorithm. Several other newer methods of complex power tracing, distribution factor, modification of generation system topology which are also considered for simulation in the case studies. The aforementioned methods in addition to the proposed algorithm are performed on a test system and the results are analyzed and compared. Numerical results show that the proposed method which is based on provable circuit theory rules is more accurate and it could be applied in the competitive environment of power market for operational, planning and economic analysis. Keywords: Power Tracing, Loss Allocation, Path Matrix, Superposition Principle, Contribution