With the advancement of the new round of electricity market reform

electricity transactions between provinces and regions have become more frequent

leading to a boom in the number of utility companies. Many small and medium-sized companies are facing a higher level of cash flow risk due to the lack of physical assets

and are prone to default and bankruptcy due to cash flow shortages

which affects the long-term healthy and safe operation of the market. Besides

the integration of large-scale renewable energy sources has led to increased congestion and electricity price volatility

increasing the financial risks on the sales side

which calls for an effective financial instrument. This paper evaluates the profit risk and cash flow risk of several congestion surplus allocation schemes for utility companies. Taking the PJM market in America as an example

this paper further analyzes the motivation and principles for hedging cash flow risks based on a mechanism combining financial transmission rights and auction revenue rights

and quantifies the demand-side cash flow risks. A case study based on the PJM 5-bus system is conducted to simulate the entire application

allocation

and settlement process of auction revenue rights. The case study verifies the effectiveness of the proposed mechanism in making the trade-off between cash flow risks and profit risks for utility companies.