Time to seriously consider optional third-party clearing of FTRs?
Article first published online: 16 DEC 2011
Copyright © 2012 Wiley Periodicals, Inc., A Wiley Company
Natural Gas & Electricity
Special Issue: Annual Outlook Issue
Volume 28, Issue 6, pages 1–7, January 2012
How to Cite
Sacra, A. (2012), Time to seriously consider optional third-party clearing of FTRs?. Nat. Gas Elec., 28: 1–7. doi: 10.1002/gas.21579
- Issue published online: 16 DEC 2011
- Article first published online: 16 DEC 2011
Since the launch of the first auction for Financial Transmission Rights (FTRs)1 in 1999, the Independent System Operator (ISO)-conducted FTR markets have seen tremendous growth. Six ISOs—CAISO, ERCOT, ISO-NE, MISO, NYISO, and PJM—now offer FTRs as a way to hedge exposure to the congestion charges that emerge when out-of-merit generators are dispatched during periods of transmission grid congestion. Over time, many ISOs have increased the variety of terms available for FTRs, allowing participants to purchase FTRs years in advance. Financial participants have increasingly joined the FTR markets as well, providing useful liquidity.