Locational marginal pricing-New England perspective

The existing New England market is an interim market which follows a uniform pricing system. The next-stage New England market, expected to function by the end of 2001, follows locational marginal pricing (LMP) supported by a multi-settlement system (MSS). This note first briefly reviews the structure and operation experience of the interim market. It then describes the main design features of the proposed LMP/MSS, including the rules for bidding, scheduling, dispatching, pricing, reserves allocation and financial congestion rights. The note also describes some alternative market design features and some issues in the design of the New England market.