The increasing use of distributed energy resources in distribution networks and introduction of microgrids have activated distribution networks. The conventional procedures of power system operation in which transmission and active distribution grids are considered separately are not appropriate for future power systems. It is necessary to consider elements of active distribution networks and microgrids in power system operation optimization to have an economical use of the power system. However, this problem cannot be solved in a centralized manner due to computational and communication requirements. In this paper, day-ahead electricity market optimization with considering active distribution networks and microgrids is decomposed into three levels of transmission, distribution, and microgrid. In the obtained tri-level model, the coordination among operators is carried out through exchanging local marginal prices, distribution local marginal prices and boundary power of active distribution networks and microgrids. Each operator attempts to minimize the costs of the entity under its supervision. Convergence and optimality of the proposed method have been shown with its implementation on the modified IEEE RTS 24-bus. Moreover, Robustness of the proposed method to the change of different parameters has been shown through a sensitivity analysis.

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