In the electricity wholesale market in the USA, the electricity price is decided on each bus by the marginal cost of increamental load, which is call locational marginal price (LMP). The load will pay LMP of its location to the system operator and the generation will get paid by this LMP of its location too.

In a congested network, the locational marginal price (LMP) can be higher than the most expensive unit’s price at some buses. Why would there be a price even higher than the most expensive generation unit?