Transmission Congestion Rights

ERCOT is a single control area based upon a zonal model. Congestion charges are imposed on qualified scheduling entities (QSEs) whose scheduled flows across a commercially significant constraint (CSC) are greater than the CSC limit, causing a constraint on that CSC.

A transmission congestion right (TCR) serves as a financial hedge against interzonal congestion costs. The TCR gives its holder the right to receive payment at the current shadow price of energy for each TCR held for the CSC path being constrained at the specific time of the constraint. The holder of the TCR is paid by ERCOT for the congestion value of that CSC.

Registration

The TCR program is open to any qualified entity; transmission distribution service providers (TDSPs) are not eligible. To apply for the program, complete the registration and credit application forms located below.

Upon approval, ERCOT will forward the TCR Account Holder Agreement for execution. Following execution, the account holder may then access the restricted Transmission Congestion Rights (TCR)Opens new browser window website.

TCR Auction

ERCOT auctions available TCRs for each CSC on an annual and monthly basis. After analyzing the bid stack, ERCOT posts the auction results on the TCR website within an hour after the auction ends. A secondary market tracking system also allows the holder of a TCR to transfer ownership to another entity.

Summer peak flow limits for CSCs provide the basis for determining the number of TCRs to be auctioned on an annual basis.

Preassigned Congestion Rights

A municipally owned utility (MOU) or electric cooperative that has long-term contractual commitments (entered into before September 1, 1999) for annual capacity and energy from a generation resource outside of its congestion zone is eligible for a preassigned congestion right (PCR). PCRs may not be traded in the secondary market. PCRs will be extended three years after a MOU or the electric cooperative enters into the competitive market.

Please see Section 7 of the protocols for additional information on congestion management, including settlements, the TCR program and PCRs.


Key Documents