The auction was held with 62 members participating and 8,500 bids cleared. Previously, financial transmission rights (FTRs) could be acquired only for the next planning year.
FTRs are financial instruments that enable holders to hedge against locational electricity price differences caused by transmission constraints in the day-ahead energy market.
Collectively, the auction cleared $18.5 million in revenue for the June to May periods of the 2009-2010, 2010-2011 and 2011-12 years.
Andrew Ott, PJM Interconnection’s senior vice president of markets, said: The success of this first auction is a strong indicator of interest in these long-term instruments, which provide more market certainty in developing long-term contracts.
The volume of transactions is about equal to the amount we generally receive in our monthly auctions, demonstrating the new auction already is drawing participation similar to the more mature FTR market.
