Obtaining FTRs
Network service
- based on annual peak load
- designated from resources to aggregate loads
Firm point-to-point service
- may be requested with transmission reservation
- designated from source to sink
Secondary market -- bilateral trading
- FTRs that exist are bought or sold
FTR Auction -- centralized market
- purchase “left over” capability
Notes:
- Transmission service customers, who acquire Network or Firm Point-to-Point Transmission Service, pay the embedded cost of the PJM transmission system. In return for paying these fixed costs, these firm transmission service owners have the option to obtain FTRs, which can serve as a hedge against transmission congestion charges.
- There are currently three ways to obtain FTRs:
- Network Service -- On a annual basis, network service transmission customers are allocated FTRs up to their annual peak load. These FTRs are designated along paths from specific capacity resources (or generators) to their aggregated loads. The configuration of the FTRs can be adjusted annually or when capacity resources are added or retired.
- Firm Point-to-Point Service -- Firm point-to-point transmission customers obtain FTRs for their associated firm reservations. The path of the FTR is the same as the path of the firm reservation from source to sink. All FTRs are allocated for the same duration as the reserved transmission service.
- Secondary Market -- Market Participants other than Network Service customers and firm point-to-point holders may obtain FTRs on the Secondary Market, via a bulletin board on the PJM OASIS. All FTRs available for purchase, as well as all FTRs traded, are posted here. This trade can occur without reassigning the transmission capacity itself. Any Market Participant can become a holder of an FTR through secondary trading.
- As of April 15, PJM will be administering an auction that will allow Market Participants to acquire and sell FTRs directly. The FTR Auction will be the focus of this training session. The opportunity of FTR owners to sell FTRs into the auction rather than exclusively through bilateral transaction is important since the FTRs demanded by the Market Participants are significantly different than the FTRs available for sale. The FTR auction provides the mechanism .