In electricity spot markets characterized by significant marginal cost disparities

using locational marginal pricing mechanism results in high consumer payments and excessive profits for low-cost units. To enhance market efficiency

pricing should improve consumer benefit and ensure adequate incentives for generators

among other objectives. Therefore

this paper proposes a tiered marginal pricing mechanism considering consumer-side affordability in the spot electricity market. Firstly

based on duality theory

this paper analyzes the underlying mechanisms by which the locational marginal price (LMP) results in high consumer payments. Then

based on an illustrative case

this paper introduces the idea of tiered marginal pricing that considers the differential costs of diverse units and coordinates total consumer payments. Further

a tiered marginal pricing optimization model targeting the minimization of total consumer payments is developed. It is proved that the proposed method can simultaneously achieve incentive compatibility for the units and ensure budget balance for the market operator. Numerical studies indicate that

compared with existing pricing mechanisms such as LMP

the proposed mechanism effectively reduces total consumer payments while maintaining economic properties

through stratified pricing optimization for different types of units.