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Congestion management has emerged as a challenge for the efficient, fair and secure operation of the competitive power markets. The selection of generators to reschedule their output for effective management of congestion is a crucial task for the system operator (SO). In this paper, an active and reactive power flow tracing based approach has been applied for selecting the most appropriate generators to reschedule their active and reactive power output based on their power flow contribution on the congested line. The cost of reactive power rescheduling has been calculated by taking into account generator reactive power capability curve and a reactive power- bidding framework. The study has been carried for pool and mix of pool with bilateral and multilateral transactions and their impact on congestion cost. The study has been carried out on 39-bus New England system.