Deregulation of electricity industry aims at creating a competitive market to trade electricity, which generates a host of new technical challenges to market participants and power system researchers. One of the major challenges is to establish a cost for system services on a non-discriminatory basis. In this paper, the evaluation of transmission cost based on sensitivity factor method such as AC power transfer distribution factor (ACPTDF) method is conducted for bilateral and multilateral transactions. The transacted power is estimated by using ACPTDF method for each transaction. The advantages of the proposed methodologies are demonstrated on sample 6-bus, IEEE 30-bus and Indian Utility 69-bus systems. The solutions provide a better pricing approach that can provide a more reasonable economic indicator for transmission cost.