New altervative for transmission congestion cost assignment in pool-based electricity markets

Abstract

The goal of deregulation is to encourage lower electric utility rates by structuring an orderly transition to competitive bulk power markets. The key is to open up transmission services, the vital link between sellers and buyers. Such open access to the transmission network has resulted in new challenges in the management of the transmission system. To achieve the benefits of robust, competitive bulk power markets, all wholesale buyers and sellers must have equal access to the transmission grid. Otherwise efficient trades can not take place, and ratepayers will bear unnecessary costs. Problems arise because all transactions have to share the same transmission network simultaneously. Congestion in the transmission network is a key obstacle to vibrant competitive electricity markets Thus; one of the most challenging problems for a deregulated power environment is how to handle the transmission congestion.