Auction Revenue Rights (ARR)

Entitlements allocated annually to Firm Transmission Service Customers that entitle the holder to receive an allocation of the revenues from the Annual FTR Auction.

Available Transfer Capability (ATC)

The amount of energy above “base case” conditions that can be transferred reliably from one area to another over all transmission facilities without violating any pre- or post-contingency criteria for the facilities in the PJM Control Area under specified system conditions.

Base Residual Auction

Allows for the procurement of resource commitments to satisfy the region’s unforced capacity obligation and allocates the cost of those commitments among the LSEs through the Locational Reliability Charge.

Capacity Resource

Includes megawatts of net capacity from existing or planned generation Capacity Resources or load reduction capability provided by Demand Resources or ILR in the PJM Region.

Daily Unforced Capacity Obligation

Equals the LSE’s Obligation Peak Load in the zone/area * the Final Zonal RPM Scaling Factor * the Forecast Pool Requirement for an LSE in a zone/area.

Day-Ahead Energy Market

A day-ahead hourly forward market in which PJM market participants may submit offers to sell and bids to buy energy. The results of the Day-Ahead Energy Market are posted daily at 4:00 p.m. and are financially binding. The Day-Ahead Energy Market is based on the concept of Locational Marginal Pricing and is cleared using least-price security-constrained unit commitment and dispatch programs.

Delivery Year

Planning period for which resources are being committed and for which a constant load obligation for the entire PJM region exists. For example, the 2007/2008 Delivery Year corresponds to the June 1, 2007–May 31, 2008 Planning Period.

eFTR

A computerized information system developed as an Internet application that is the Market Participant interface to the monthly FTR Auction. This application also facilitates trading of Fixed Transmission Rights on a bilateral basis (secondary market trading).

eMKT

A computerized information system developed as an Internet application that is the Market Participant interface to the PJM Day-Ahead Energy Market and Real-Time Energy Market. This application provides an interface for Market Participants to submit Generation Offer Data Demand Bids, Increment Offers, Decrement Bids and Regulation Offers and to view Day-Ahead Energy Market Results and Regulation Market Results on a daily basis.

Equivalent Demand Forced Outage Rate (EFORd)

A measure of the probability that [a] generating unit will not be available due to forced outages or forced deratings when there is a demand on the unit to generate.

Financial Transmission Right (FTR)

A financial instrument that entitles the holder to receive compensation for certain congestion-related transmission charges that arise when the grid is congested and differences in locational prices result from the redispatch of generators out of merit order to relieve that congestion.

Firm Transmission Service

Transmission service that is intended to be available at all times to the maximum extent practicable, subject to an emergency, and unanticipated failure of a facility, or other event beyond the control of the owner or operator of the facility or PJM.

FTR Auction

A monthly market for FTR trading that is administered by PJM in which PJM Market Participants and Transmission Customers may submit offers to sell and bids to buy on-peak or off-peak FTRs. FTRs awarded in this auction have a term of one calendar month.

Incremental Auctions

Allow for an incremental procurement of resource commitments to satisfy an increase in the region’s unforced capacity obligation due to a load forecast increase or a decrease in the amount of resource commitments due to a resource cancellation, delay, derating, EFORd increase, or decrease in the nominated value of a Planned Demand Resource.

InSchedules

A computerized information system, developed by PJM as an Internet application, that allows Load Aggregators and LDCs to provide and obtain information needed to schedule Internal Transactions under the Customer Choice Program.

Internal Transaction

An energy transaction between two parties in which the path of the energy remains inside the PJM RTO borders.

Load Aggregator (LA)

A licensed entity that may provide (sell) energy to retail customers within the service territory of a Local Distribution Company. Also known as Electric Generation Supplier (EGS).

Load Serving Entity (LSE)

Any entity (or the duly designated agent of such an entity), including a load aggregator or power marketer that (a) serves end-users within the PJM Control Area, and (b) is granted the authority or has an obligation pursuant to state or local law, regulation, or franchise to sell electric energy to end-users located within the PJM Control Area.

Local Distribution Company (LDC)

A company in whose service territory Load Aggregators are providing energy to retail customers and whose distribution system is being used to transport the energy. Also known as Electric Distribution Company (EDC).

Locational Marginal Price (LMP)

The hourly integrated market clearing marginal price for energy at the location the energy is delivered or received.

Locational Reliability Charge

Fee applied to each LSE that serves load in PJM during the Delivery Year. Equal to the LSEs Daily Unforced Capacity Obligation multiplied by the applicable Final Zonal Capacity Price.

Market Participant

A Market Buyer or a Market Seller, or both.

Obligation Peak Load

The summation of the weather normalized coincident summer peaks for the previous summer of the end-users for which the Party was responsible on that billing day.

PJM Region

PJM Region represents the aggregate of the PJM Mid-Atlantic Control Zone and the PJM West Region.

Planned Demand Resource

A Demand Resource that does not currently have the capability to provide a reduction in demand or to otherwise control load, but that is scheduled to be capable of providing a reduction or control on or before the start of the Delivery Year for which the resource is to be committed.

Planning Period

The 12 months beginning June 1 and extending through May 31 of the following year. As changing conditions may require, the Markets and Reliability Committee may recommend other Planning Periods to the PJM Board of Managers.

Sink

The bus, buses, company, or pool receiving the transferred energy to evaluate ATC transfers for a given path using generation or load changes, or

The point of receipt of the energy in a PJM InSchedules Contract.

Source

The bus, buses, company, or pool supplying the energy used to evaluate ATC transfers for a given path using generation or load changes, or

The point of delivery of the energy in a PJM InSchedules contract.

Unforced Capacity (UCAP)

Installed capacity rated at summer conditions that are not on average experiencing a forced outage or forced derating, calculated for each Capacity Resource on the 12-month period from October to September without regard to the ownership of or the contractual rights to the capacity of the unit.

Zonal Capacity Price

The price of UCAP in a Zone that an LSE that has not elected the FRR Alternative is obligated to pay for a Delivery Year. Zonal Capacity Prices are calculated in the Base Residual Auction or the Second Incremental Auction clearing process as the sum of (1) the marginal value of system capacity for the PJM Region; (2) the Locational Price Adder, if any, for such zones in a constrained Locational Deliverability Area (LDA); and (3) an adjustment in the Zone, if required, to account for any resource make-whole payments. Preliminary Zonal Capacity Prices are the result of the clearing of the Base Residual Auction. Adjusted Zonal Capacity Prices are the result of the clearing of the Second Incremental Auction. Final Zonal Capacity Prices are determined after the ILR Resources are certified (3 months prior to the Delivery Year).