This paper proposes an approach to transmission congestion management in a deregulated power system. Congestion in a transmission system can result in very high locational prices for electricity determined by marginal costs from optimal power flow (OPF) solutions. In heavily congested conditions, physical transmission congestion can be relieved by curtailing a small portion of non-firm transactions. Resultant marginal cost-based electricity prices should drastically decrease. Simple and transparent indices are introduced so that both load and supplier can express their levels of acceptance of the congestion management process, and the system operator can select the most effective and desirable congestion relief measures. The proposed approach is tested on a modified IEEE 30 bus system.
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