LMP and FTR Concepts
PN1
PN2
PN3
Gen 1
Gen 2
Gen 3
Load 3
$22 Bid
$27 Bid
$32 Bid
100 MW
80 MW
20 MW
0 MW
80 MW Rating
120 MW
Rating
LMP’s
PN1 $22
PN2 $27
PN3 $27
Marginal Charge  for Congestion (PN1- PN2) = ($27 - $22)*100 = $500
Average Cost of Congestion (PN1 - PN2) = ($27*20) – ($22*20) = $100
If Load 3 held an 80 MW FTR from PN1 to PN2, it would receive a payment of ($27-$22)*80 or $400.