Power Generation, Transmission, and Use

Markets, Regulation, and Oversight

Impacts of Power Generation and Transmission

Looking Ahead


CEIR Report Map


Maryland Power Plants and the Environment (CEIR-18)

3.3.2 Congestion

The economic impacts of transmission congestion are described in Section 3.1.1; however, congestion may also affect reliability if a transmission line nears or exceeds its transfer limit (the physical limit of the transmission system) and there are no supplemental generation resources downstream of the constraint. If this occurs, system operators might ask large customers to voluntarily curtail their loads or, in extreme situations, may even be forced to reduce electricity deliveries to consumers. Economic congestion that results in higher electricity costs is far more common than a loss of load, or a blackout event, caused by insufficient transmission or generation resources. Economic congestion results when a transmission path is unable to provide access to the lowest cost generation to serve load requirements in particular locations. This circumstance entails more expensive generation located along an uncongested path to be used to meet load requirements. The difference in generation cost between the lowest cost (but unavailable) generation and the higher cost (but available) generation represents the congestion cost.

Eliminating or reducing key constraints can alleviate congestion. This may be achieved through construction of new transmission lines, building new generation within a load pocket, upgrades to existing facilities, or demand side management. PJM routinely conducts transmission planning to ensure reliability is maintained. In that regard, congestion that threatens reliability will be addressed in PJM’s transmission planning process. Economic congestion, as described in Section 3.1.1, is congestion that produces localized increases in electricity prices, but does not trigger a reliability event. Economic congestion is not addressed in PJM’s reliability planning since it is considered an economic decision rather than a reliability problem. However, depending on the total economic impact and benefits, PJM may suggest corrective projects as part of its economic planning process.