©2004 PJMwww.pjm.com 1

STATE OF THE MARKET REPORT 2003

Joseph E. BowringManagerPJM Market Monitoring Unit

FERC BriefingWashington, D.C.April 14, 2004

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State of the Market Conclusions

• Energy market results were competitive

• Capacity market results in PJM Mid-Atlantic Region were competitive

• Capacity market in PJM Western Region – no functioning competitive market

• Regulation market results were competitive

• Spinning market results were competitive

• FTR market results were competitive

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2003 PJM Average Hourly Load and Spot Market Volume

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Average PJM Aggregate Supply Curves: June to September 2002 and 2003

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PJM Peak Load Comparison: Friday, August 22, 2003, and Wednesday, August 14, 2002

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PJM Average Hourly Locational Marginal Prices (in Dollars per MWh)

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PJM Load-Weighted, Average LMP (in Dollars per MWh)

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PJM Load-Weighted, Fuel-Cost-Adjusted LMP (in Dollars per MWh)

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Load-Weighted Average Monthly LMP: Real-Time Market

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Natural Gas Cash Prices

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Type of Fuel Used by Marginal Units

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PJM Average Monthly Load

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Price Duration CurveHours Above the 95th Percentile

©2003 PJM

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Load Duration Curve

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Average All-In Market Price

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

1999 2000 2001 2002 2003

($/M

Wh)

Energy Cost Capacity Cost Ancillary Cost Uplift Cost

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PJM Average Hourly System LMP

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PJM Hourly Energy Market HHI: 2003

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PJM RSI Index Duration Curve: 2002-2003

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Average Monthly Load-Weighted Markup Indices

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PJM Mid-Atlantic Region’s Capacity Obligations: Januarythrough May 2003

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PJM Capacity Obligations: June through December 2003

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PJM Daily and Monthly Capacity Credit Market Performance:January 2000 through December 2003

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Estimated Net RevenueCombustion Turbine

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1999 2000 2001 2002 2003

($ p

er In

stal

led

MW

- Y

ear)

CT Energy Capacity Ancillary

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Equivalent Forced Outage Rates

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1999 2000 2001 2002 2003

EF

OR

d (%

)

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Queued Capacity by In-Service Date

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Average Real-Time Offer-Capped Units (by Month)

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Percent of Real-Time Offer-Capped MW (by Month)

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PJM Real-Time Imports and Exports: 2003

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Annual Zonal LMP Differences: Reference to Western Hub

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ARR and FTR Congestion Hedging