In the electricity market environment

a reasonable market mechanism is demanding for guiding the behaviors of interruptible loads and flexible loads such as the charging loads of electric vehicles (EVs) to alleviate peak demands and system congestion. First

according to the response characteristics of different kinds of loads

the temperature controlled domestic loads are chosen as controllable loads. Besides

the EV charging demand and discharging power with the vehicle to grid (V2G) mode are considered as flexible loads. The demand response models of the controllable/EV demands are presented based on their thermal models/charging and discharging characteristics. Then

given the economic rationality of the retail agents (RAs) for interruptible and EV loads and the demand response models

RAs will formulate the initial bidding plans for the next trading day; the initial bidding plans will be verified by the distribution system operator

and an optimal power flow model will be employed to calculate congestion fees if applicable. Afterwards

the RAs will employ these congestion fees to reschedule and coordinate the domestic controllable loads and EV charging/discharging loads

given that the customers’ needs and constraints are properly respected. With the proposed market mechanism

the peak demands can be alleviated and distribution system congestion avoided to a great extent. Finally

the developed market mechanism

mathematical models and congestion management strategy are demonstrated through the modified IEEE 33-bus distribution system.