  Traditionally, the electric distribution system operates with uniform energy
prices across all system nodes. However, as the adoption of distributed energy
resources (DERs) propels a shift from passive to active distribution network
(ADN) operation, a distribution-level electricity market has been proposed to
manage new complexities efficiently. In addition, distribution locational
marginal price (DLMP) has been established in the literature as the primary
pricing mechanism. The DLMP inherits the LMP concept in the transmission-level
wholesale market, but incorporates characteristics of the distribution system,
such as high R/X ratios and power losses, system imbalance, and voltage
regulation needs. The DLMP provides a solution that can be essential for
competitive market operation in future distribution systems. This paper first
provides an overview of the current distribution-level market architectures and
their early implementations. Next, the general clearing model, model
relaxations, and DLMP formulation are comprehensively reviewed. The
state-of-the-art solution methods for distribution market clearing are
summarized and categorized into centralized, distributed, and decentralized
methods. Then, DLMP applications for the operation and planning of DERs and
distribution system operators (DSOs) are discussed in detail. Finally, visions
of future research directions and possible barriers and challenges are
presented.
