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ISO advances targeted change to congestion‑revenue allocation to protect transmission customers
Summary
The California ISO proposed a targeted allocation change to ensure that congestion revenues tied to parallel flows are allocated to the balancing area where transmission customers exercise firm rights, a move officials said would preserve congestion‑cost protection for customers who use point‑to‑point transmission rights under EDAM.
Milos Kosanec, regional market sector manager at the California ISO, told Utah regulators the ISO has developed a targeted change to congestion‑revenue allocation intended to address stakeholder concerns about parallel‑flow congestion in the EDAM design.
The ISO explained that locational marginal prices (LMPs) have three components: energy, congestion and losses. The difference between the LMP paid to a generator and the LMP charged to load — the congestion component — produces congestion revenues that the market collects and must allocate back to participants through settlement.
Under the EDAM design that FERC approved earlier, congestion revenue associated with a particular transmission constraint was allocated to the balancing area where that constraint is located. Protesters in the Pacificorp tariff filing argued that,…
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