Transmission Constraint Relaxation and Pricing in the New York Electricity Market

The New York Independent System Operator (NYISO) has adopted two-stage transmission constraint relaxation and pricing as part of its congestion management process. The first stage solves the Security Constrained Economic Dispatch (SCED) using the original transmission constraint limit; a large penalty cost is applied to screen for infeasible transmission constraints. The second stage relaxes any infeasible transmission constraint up to its constraint reserve margin and resolves the SCED with the relaxed transmission constraint limit. The NYISO's graduated transmission shortage cost is applied in the second stage to limit the cost SCED can incur to resolve transmission congestion. The shadow price of the transmission constraint is capped by the graduated transmission shortage cost.