On October 12, PJM Interconnection posted on pjm.com a report, Virtual Transactions in the PJM Energy Markets, in response to stakeholders’ request for clarity around certain aspects of the virtual transactions. The report also recommends some rule reforms to be discussed and vetted with stakeholders.
Virtual transactions, which play a vital role in PJM’s markets, are purely financial transactions. They are bids and offers submitted to take financial positions in the Day-Ahead Market without the intent of delivering or consuming physical power in the Real-Time Market.
This report was also provided to the PJM Board of Managers.
The report explains more on the nature of virtual bidding and also examines its purpose, the mechanics of transactions, potential problems and examples of how transactions are used by participants.