The paper proposes feasible and acceptable distributed slack power flow (DSPF) formulation for the settlement process of active power market in deregulated system with single-sided bidding. In general market clearing is done using single slack bus model but whenever marginal bus changes loss price varies drastically. In order to prevent the sudden changes in loss price, optimization using distributed slack model is suggested in this paper. The loss factor approach is used in determining the feasible participation factor. The proposed strategy is verified using PJM 5 bus system. © 2021, Springer Nature Singapore Pte Ltd.