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 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 (MW) on the intertie. The cumulative total congestion rent for interties in January rose to $10.59 million from $6.15 million in December. Majority of the congestion rents in January accrued on Palo Verde (61 percent) and IPP DC Adelanto (28 percent) interties. The congestion rent on Palo Verde rose to $6.42 million in January from $5.13 million in December, and on IPP DC Adelanto rose from $12,000 in December to $3.00 million in January.

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