Locational Market Power Screening and Congestion Management: Experience and Suggestions

The existing New England electricity market follows a uniform pricing system: infra-marginal generators are paid a uniform clearing price while constrained-on generators are paid bid prices subject to a locational market power screen. In this paper, we first report the operation experience of this approach during the market´s first two years. We then briefly review the NEPOOL locational pricing proposal being implemented. Two new approaches for locational market power screening are presented. The first one is based on a zonal network model and the second is based on a nodal transmission model. Both approaches are being evaluated by an independent consultant and are be to recommended to NEPOOL. Test results of both approaches are included.