Congestion Management Requirements, Methods and Performance Indices

Abstract

Transmission congestion occurs when there is insufficient transmission capacity to simultaneously accommodate all requests for transmission service within a region. Historically, vertically integrated utilities managed this condition by constraining the economic dispatch of generators with the objective of ensuring security and reliability of their own and/or neighboring systems. Electric power industry restructuring has moved generation investment and operations decisions into the competitive market but has left transmission as a communal resource in the regulated environment. This mixing of competitive generation and regulated transmission makes congestion management difficult. The difficulty is compounded by increases in the amount of congestion resulting from increased commercial transactions and the relative decline in the amount of transmission. Transmission capacity, relative to peak load, has been declining in all regions of the U.S. for over a decade. This decline is expected to continue. Congestion management schemes used today have negative impacts on energy markets, such as disruptions and monetary penalties, under some conditions. To mitigate these concerns various congestion management methods have been proposed, including redispatch and curtailment of scheduled energy transmission. In the restructured electric energy industry environment, new congestion management approaches are being developed that strive to achieve the desired degree of reliability while supporting competition in the bulk power market. This report first presents an overview and background on key issues and emerging approaches to congestion management. It goes on to identify and describe policies affecting congestion management that are favored and/or are now being considered by FERC, NERC, and one of the regional reliability councils (WSCC). It reviews the operational procedures in use or proposed by three of the leading independent system operators (ISOs) including ERCOT, California ISO, and PJM. Finally, it presents recommendations for evaluating the competing alternative approaches and developing metrics to use in such evaluations. As with any report concerning electricity restructuring, specific details quickly become dated. Individual utilities, states and regions will inevitably change rules and procedures even during the time it takes to publish a report. Hopefully, the general conclusions are more robust and this report will continue to have value even after some of the specific details have changed.