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Design of New England’s Wholesale Electricity Market - page 24 / 42

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24

Absence of Location-Based Congestion Pricing is Inefficient

Don’t pay costs you impose on system

Especially a problem for imports/exports

Paying out-of-merit-order generators their bids invites gaming

Distort bids to get constrained-on payments

Poor incentives for location of new generation/transmission

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