The LMP supermodel

With Ferc’s standard market design (SMD) seeking a shift from zonal power pricing to nodal pricing, the concept of locational marginal pricing (LMP) has become a key policy issue. Henwood Energy’s Vikram Janardhan proposes 10 key modelling features to look for in an analytical tool that can simulate LMPs and SMD markets


The US electricity market is fast becoming intensely competitive. On March 15, 2002, the Federal Energy Regulatory Commission (Ferc) issued Order 2000 to advance the formation of regional transmission organisations (RTOs) and further develop wholesale competition in the power utility sector.

Ferc’s aim is to improve certainty in market rules across RTO geographies, streamline operations across all independent system operators (ISOs) and ultimately facilitate the creation of a

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