Load Zone
Under SMD, demand, or load, pays the price calculated for eight load zones, or aggregations of nodes. New England wis divided into the following zones: Maine, New Hampshire, Vermont, Rhode Island, Connecticut, Western/Central Massachusetts, Northeastern Massachusetts (which includes Boston) and Southeastern Massachusetts.
The eight load zones under SMD coincide with the eight reliability regions in New England. Reliability regions reflect the operating characteristics of and the major transmission constraints on the transmission system.
The prices calculated for load zones are a load-weighted average of the nodal prices located within each zone. They still reflect the cost of congestion and represent a true cost for delivering power by location. But because they are an aggregation of nodes, zonal prices are less volatile than nodal prices.
Hub
In addition to the nodes and zones, a hub has been defined as a single trading location in which the average price is not affected significantly by congestion. It provides a stable pricing location for energy transactions within New England, which serves to enhance transparency and liquidity in the marketplace.
The hub is calculated as an average of the prices at all of the nodes defined of the hub. These nodes are electrically connected and are located in an area that has little congestion within it and therefore has a price that reflects the overall energy price.
