PJM Interconnection auctions Financial Transmission Rights (FTRs) to assist market participants in hedging their price risk when delivering energy on the grid.
FTRs are financial instruments that entitle the holder to a stream of revenues (or charges) based on the hourly congestion price differences across a transmission path in the Day-Ahead Energy Market.
FTRs provide a hedging mechanism that can be traded separately from transmission service. Market participants are able to hedge against their congestion costs by acquiring FTRs that are consistent with their energy deliveries.
Market participants can manage their FTR portfolios by using the
eFTR tool. Participants use eFTR to post their FTRs for bilateral trading as well as to participate in the scheduled monthly, annual and long term FTR auctions.
For more information on FTRs, read the
FTR FAQs.