pjm electric marketaug 23, 2010 · pjm electric market: overview and focal points 1045 overview...

Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight

PJM Electric Market: Overview and Focal Points

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PJM Electric Market

Source: Velocity Suite Intelligent Map Updated August 23, 2010

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Overview

Market Description:PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia, an area that includes more than 51 million people. As of December 31, 2009, it had installed generating capacity of 167,326 megawatts (MW) and over 500 market buyers, sellers and traders of electricity. In 2009 demand peaked at 126.8 GW on August 10, the lowest annual peak since the last transmission integration.

Geography

States covered: All or most of Delaware, District of Columbia, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia. Parts of Indiana, Illinois, Kentucky, Michigan, North Carolina and Tennessee.

Reliability region: ReliabilityFirst Corporation (RFC) and SERC Reliability Corporation (SERC)

Balancing authority: PJM. The balancing authority is responsible for managing the minute-to-minute supply/demand balance for electricity within its borders to assure reliability.

Control zones:Allegheny Power Systems (AP) American Electric Power (AEP)Atlantic Electric Power Company, Inc. (AECO) Baltimore Gas and Electric Company (BGE)ComEd Dayton Power and Light Company (DAY)Delmarva Power and Light Company (DPL) Dominion (DOM)Duquesne Light (DUQ) Jersey Central Power and Light Company (JCPL)Metropolitan Edison Company (METED) PPL Electric Utilities (PPL)PECO Energy (PECO) Pennsylvania Electric Company (PENELEC)Potomac Electric Power Company (PEPCO) Public Service Electric and Gas Company (PSEG)Rockland Electric Company (RECO)

Source: PJM 2009 State of the Markets ReportUpdated August 23, 2010

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Hubs:AEP GEN, AEP-Dayton, Chicago GEN, Chicago, Dominion, Eastern, N. Illinois, New Jersey, Ohio, West INT, Western.

RTO/ISO:PJM Interconnection (PJM) operates the region’s power grid and wholesale electric market:

• Energy market: two-settlement (day ahead and real-time) spot market with locational marginal pricing (prices are calculated at each bus every five minutes)• Capacity Markets• Ancillary services markets• Financial transmission rights (FTR) market• Energy and capacity are also traded bilaterally through brokers and the Intercontinental Exchange (ICE).

PJM 2009 State of the Markets Report (and links to prior annual reports)

Market Monitoring Unit: Monitoring Analytics, LLC – External Market Monitor

Generation/Supply :

Marginal fuel type (2009): Coal (74%) and natural gas (22%)Generating capacity (summer 2009): 167,454 MWCapacity reserve (summer 2009): 40,649 MWReserve margin (summer 2009): 32%

Source: PJM 2009 State of the Markets ReportUpdated August 23, 2010

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http://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2009.shtml



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Demand

All time peak demand: 144,644 MW (Set August 2, 2006)

Summer Peak Demand (MW):2006: 144,6442007: 139,428 2008: 130,1002009: 126,805

Peak demand change (2008-2009): 2.5% Decline

Prices

Annual Average Day-Ahead Price All Hours (MWh):

PJM Western Hub - A basket of 109 buses from Erie PA to Washington DC (Derived from Energy Velocity data)2006: $50.07/MWh2007: $57.00/MWh2008: $69.88/MWh2009: $38.71/MWh

Contact Information:For questions regarding the material in the PJM section please contact out staff at:

[email protected]

Source: PJM 2009 State of the Markets Report Updated September 7, 2010

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Daily Average of PJM Day-Ahead Prices - All Hours

PJM Electric Market: Last Month’s RTO Prices

Source: Derived from Bloomberg PJM data. 1131

$0

$25

$50

$75

$100

$125

$150

$175

$200

2/1/

11

2/4/

11

2/7/

11

2/10

/11

2/13

/11

2/16

/11

2/19

/11

2/22

/11

2/25

/11

2/28

/11

Pric

e ($

/MW

h)

N Illinois Hub

Eastern Hub

Western Hub

Dominion Hub

30 Day Rolling Average Price

$0$25$50$75

$100$125$150

2006

2007

2008

2009

2010

2011

Updated: March 08, 2011

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Daily Average of PJM Day-Ahead Prices - All Hours

PJM Electric Market: RTO Prices

Source: Derived from Bloomberg data.1048

$0

$25

$50

$75

$100

$125

$150

$175

$200

Jan-

10Fe

b-10

Mar

-10

Apr-1

0M

ay-1

0Ju

n-10

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g-10

Sep-

10O

ct-1

0No

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n-11

Feb-

11

Pric

e ($

/MW

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N Illinois Hub

Eastern Hub

Western Hub

Dominion Hub

30 Day Rolling Average

$0$40$80

$120$160

2006

2007

2008

2009

2010

2011


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Eastern Daily Bilateral Day-Ahead On-Peak Prices

PJM Electric Market: Eastern Bilateral Prices

Source: Derived from Platts data.

1049

$0

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$300

Jan-

10Fe

b-10

Mar

-10

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ct-1

0No

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n-11

Feb-

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Into CinergyPJM WestDominion HubWest New YorkMass Hub

Monthly Average

$0$25$50$75

$100$125$150

2006

2007

2008

2009

2010

2011

Pric

e ($

/MW

h)


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Eastern Daily Bilateral Day-Ahead On-Peak Prices

PJM Electric Market: Last Month’s Eastern Bilateral Prices

Source: Derived from Platts data.

13562

$0

$20

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$80

$100

$120

$140

$160

$180

$2002/

1/11

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5/11

2/7/

112/

9/11

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/11

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Into CinergyPJM WestWest New YorkMass HubDominion Hub

Monthly Average

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$50

$100

$150

$200

2006

2007

2008

2009

2010

2011

Pric

e ($

/MW

h)


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Implied Heat Rates at Eastern Trading Points Weekly Averages

PJM Electric Market: Eastern Implied Heat Rates

Source: Derived from Platts on-peak electric and natural gas price data.

1138

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

Jan-

10Fe

b-10

Mar

-10

Apr-1

0M

ay-1

0Ju

n-10

Jul-1

0Au

g-10

Sep-

10O

ct-1

0No

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Dec-

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n-11

Feb-

11

Impl

ied

Hea

t Rat

e (B

tu/k

Wh)

East New York Zone J-Transco Zone 6 NY PJM West-Columbia Gas AppalachiaWest New York-Niagara Mass Hub-Tennessee Zone 6

5-year Trend

04,0008,000

12,00016,00020,00024,000

2006

2007

2008

2009

2010

2011


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Weekly Electric Generation Output and Temperatures Mid Atlantic Region

PJM Electric Market: Generation Output and Temperatures

Source: Derived from EEI and NOAA data.

1113

0

2,000

4,000

6,000

8,000

10,000

12,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ele

ctric

Gen

erat

ion

(GW

h)

2006-10 Range2011

-80-60-40-20

020406080

War

mer

Tem

pera

ture

s th

anN

orm

al (D

egre

e D

ays)

Heating SeasonHeating Season Cooling Season


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Weekly Electric Generation Output and Temperatures Central Industrial Region

PJM Electric Market: CI Generation Output and Temperatures

Source: Derived from EEI and NOAA data.

1114

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ele

ctric

Gen

erat

ion

(GW

h)

2006-10 Range2011

-80-60-40-20

020406080

War

mer

Tem

pera

ture

s th

anN

orm

al (D

egre

e D

ays)

Heating SeasonHeating Season Cooling Season


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PJM, NYISO and ISO-NE Capacity Prices

PJM Electric Market: RTO Capacity Prices

1146

0

20

40

60

80

100

120

PJM

RTO

AP

S

MA

AC

SW

MA

AC

EM

AA

C

DP

L-S

outh

PS

-Nor

th

ISO

-NE

NY

ISO

NY

C

NY

ISO

LI

NY

ISO

RO

S

$/kW

-yr

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008

2008/2009 2009/2010 2010/2011 2011/2012 2012/2013

Note: PJM RPM values are for Base Residual Auctions only. ISO-NE FCM results are based on preliminary FCM auction before pro-rationing and EAS adjustment.Source: Derived from PJM, NYISO and ISO-NE data Updated October 7, 2009

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PJM West Electric Forward Price Curves and Implied Heat Rates

PJM Electric Market: Forward Price Curve

Source: Derived from Nymex data

1052

4,000

6,000

8,000

10,000

12,000

14,000

Mar

11

May

11

Jul1

1

Sep1

1

Nov

11

Jan1

2

Mar

12

May

12

Impl

ied

Hea

t Rat

e

$0

$10

$20

$30

$40

$50

$60

Ele

ctric

Pric

e ($

/MW

h)

2

4

6

8

10

12

14

16

18

20

Gas

Pric

e ($

MM

Btu)

PJM West Columbia Gas Appalachia


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PJM Western Hub Forward and Swap Volumes

PJM Electric Market: Physical & Financial Market Volumes

Source: Derived from ICE and Nymex ClearPort data.

ICE on-peak forward (physical) and swap (financial) volumes are for PJM’s Western Hub and include monthly, dual monthly, quarterly, and calendar year contracts traded for each month. Nymex ClearPort on-peak swap (financial) volumes are for PJM’sWestern Hub traded by month.

1050

0

50

100

150

200

250

300Ja

n-10

Feb-

10M

ar-1

0Ap

r-10

May

-10

Jun-

10Ju

l-10

Aug-

10Se

p-10

Oct

-10

Nov-

10De

c-10

Jan-

11Fe

b-11

Mar

-11

Apr-1

1M

ay-1

1Ju

n-11

Jul-1

1Au

g-11

Sep-

11O

ct-1

1No

v-11

Dec-

11

Thou

sand

s of

GW

h

ICE PJM Swaps Volume

ICE PJM Forwards Volume

ClearPort PJM Swaps


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pjm electric marketaug 23, 2010 · pjm electric market: overview and focal points 1045 overview...

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