What benefit does LMP bring to New England?
In the short-term, LMP improves the efficiency of the wholesale electricity market by ensuring that the cost of congestion is reflected in electricity prices and ensures that the least-cost supply of electricity is delivered while respecting the physical limitation of the transmission network. In the long-term, LMP helps relieve congestion by promoting efficient investment decisions. Because LMP creates price signals that reflect the locational value of electricity, participants can readily determine areas of congestion and will see the value of investing in generation, transmission and demand response programs.
