Transmission congestion occurs when demand for power flows exceeds the capacity of transmission lines, causing local prices (locational marginal prices or LMPs) to spike. High congestion levels force grid operators to dispatch expensive local generators, leading to higher electricity rates. Conversely, low congestion indicates efficient transmission paths and helps keep prices lower.
Transmission Congestion Levels
$12+ billion/year
Direction: Up
Grid congestion costs have remained above $10 billion per year for four years and exceeded $12 billion in 2024, reflecting persistent congestion and insufficient transmission capacity【402374103042769†L58-L65】.