Although there is no certain methodology for a restructuring electricity industry, the transformations often involve separation of generation and transmission. As a result, the transmission sector will become a separated company. Thus, this creates the need for transmission service charge. In Thailand, the National Energy Policy Office (NEPO) of the Thai government has engaged the Price Waterhouse Cooper (PWC) consultant to propose a transmission service charge for the transmission business unit, the Electricity Generating Authority of Thailand (EGAT) from 1999-2003. The PWC's transmission pricing is based on long-run average incremental cost (LRAIC) and average loss which is unfair to consumers since it does not account for their bus locations. This paper proposes a transmission pricing method based on long-run incremental cost (LRIC) and electricity tracing. Comparing the proposed method with the PWC's method, the proposed charging method is fair and provides the correct signal for locational advantage, whereas both methods satisfy the financial requirements.