Financial Transmission Rights (FTRs) are financial instruments that entitle
the holder to a stream of revenues (or charges) based on the day-ahead
hourly energy price differences across the transmission path. The purpose
of a Financial Transmission Right is to provide all market participants
the ability to have price certainty when delivering energy across the
PJM system. FTRs provide a hedging mechanism that can be traded separately
from transmission service.
In order to assist in understanding FTRs and the FTR Auction clearing
process the following informational material is being provided.
