4 Congestion

Congestion occurs when available least-cost energy cannot be delivered to some loads because transmission facilities do not have sufficient capacity to deliver the energy. When the least-cost, available energy cannot be delivered to load in a transmission-constrained area, higher cost units in the constrained area must be dispatched to meet that load. The result is the price of energy in the constrained area will be higher than in the unconstrained area because of the combination of transmission limitations and higher cost local generation. Congestion rent is the difference between rent payments made by load and exports and revenues received by generation and imports.

Congestion Rents on Interties

Figure 7 below illustrates the IFM congestion costs on interties. The congestion cost is calculated as shadow price ($/MWh) of the intertie constraint multiplied by the flow limit (MW) on the intertie.

The cumulative total congestion rent for interties in April fell to $0.10 million from $1.25 million in the previous month. Majority of the congestion rents in April accrued on IID-SCE (89 percent) and COTPISO (11 percent) interties. The congestion rent on IID-SCE intertie decreased to $0.09 million in April from $0.15 million in the previous month, while congestion rents on COTPISO intertie in April increased to $11,400 from $8,110 in the previous month.

Figure 7: IFM (Day-Ahead) Congestion Rents by Intertie

Congestion Rents on Transmission Lines and Transformers

Figure 8 illustrates IFM congestion rents by transmission lines and transformers. The congestion cost is calculated as the shadow price ($/MWh) of the constraint multiplied by the flow limit (MW).

Figure 8: IFM (Day-Ahead) Congestion Rents by Transmission Lines and Transformers

Congestion Rents on Nomograms

Figure 9 illustrates IFM congestion rents by nomogram. The congestion rent is calculated as the shadow price ($/MWh) of the constraint multiplied by the flow limit (MW).

Figure 9: IFM (Day-Ahead) Daily Congestion Rents by Nomogram

Congestion Rents on Nodal Group Constraints

Figure 10 illustrates IFM congestion rents by nodal group constraints. The congestion rent is calculated as the shadow price ($/MWh) of the constraint multiplied by the flow limit (MW).

Figure 10: IFM (Day-Ahead) Daily Congestion Rents by Nodal Group Constraints