Congestion Revenue Right as a part of asset portfolio

The deregulation of electricity market converted the classical business model of utility companies, rate of return, to a market oriented asset (physical asset, power purchase agreement, tolling agreement, contract obligation, and etc.) portfolio management. Market price has been the most important driver for this business model. Implementation of locational marginal pricing (LMP) in deregulated wholesale power markets added another angle in this business model. In this presentation, main issues and thoughts related to congestion revenue right (CRR) in Texas nodal market, an important hedging instrument for congestion management, were laid out.