How does ISO New England mitigate in congested areas under SMD?
The monitoring and mitigation structure under SMD reduces the likelihood of the exercise of locational market power by a particular supplier in congested areas while still allowing important local price signals. Specifically, ISO New England has the authority to mitigate or replace inappropriate offers by generating units in congested areas. Thresholds have been established for the assessment and mitigation of locational market power in areas that experience congestion. The thresholds for acceptable conduct set under SMD recognize that areas with congestion pose a higher threat of negative market impacts and could unjustly increase costs in those areas. These thresholds determine when conduct is anti-competitive and can trigger immediate action by ISO New England. This action is designed to occur prior to the clearing of the market and thus to prevent unwarranted price increases in congested areas.
