CoachThe locational marginal price (LMP) at a node of a network is the cost of serving one more MWh there at least cost, subject to the network’s limits: in US markets the sum of a system energy price, a congestion component and a loss component. The congestion rent on a constrained line is the price difference between its ends times the flow on it; it accrues to whoever holds the line’s capacity rights (in coupled markets, the grid operators).
