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by Quinn Gray
Financial transmission rights (FTRs), also known as TCCs, TCRs, and CRRs, help facilitate healthy and competitive electricity markets. They are a key financial instrument for traders speculating and hedging risk across ISOs in the U.S. They are also complex by nature.
This complexity requires an in-depth knowledge of all of the grid’s components and the variables that can impact pricing. One of those variables is transmission constraints, which cause congestion. FTR traders need to be able to analyze how constraints impact congestion prices and the profitability of specific paths in order to build successful portfolios.
Using FTR auction binding constraints to understand how congestion changes auction-over-auction is critical to that analysis.
What Are FTR Constraints?
FTR constraints are published with each ISO’s auction results.
They come from the ISO’s FTR model run, similar to how day-ahead (DA) constraints come from the ISO’s DA model run. FTR constraints represent the congestion modeled within each FTR auction process, which makes them an essential part of understanding the ever-changing congestion landscape as a whole.
Which ISOs Report FTR Constraint Data? Where Can I See It in Yes Energy’s Tools?
This data is published by 5 ISOs – ERCOT, SPP, MISO, NYISO, and PJM. Yes Energy transforms these raw constraint files into actionable insights by allowing traders to visualize those constraints on the maps in our PowerSignals or DataSignals solution.
Here's an example of the FTR constraint data for ERCOT’s September monthly auction.
In the example above, traders can visualize the congestion caused by FTR constraints across longer timeframes.
Market Changes
One of the major benefits of using this data within Yes Energy’s tools is that we stay on top of the market changes so that you don't have to.
PJM recently split their OffPeak into two new peak types: WkndOnPeak and DailyOffPeak, allowing for greater granularity and flexibility in trading FTRs. This change went into effect on September 1, 2022, for the October 2022 monthly auction. Read more about PJM’s FTR Peak Type changes.
You can adjust the peak types in your analysis of FTR constraints to see how congestion changes across different hours of the day and across different auctions.
In the example above, we are looking at the auction for October (green) and November (pink) in PJM for WE on-peak hours.
FTR constraint data provides traders with the insights needed to fully understand congestion pricing in FTR markets across multiple auctions.
Conclusion
Yes Energy has the data FTR traders need – using and visualizing this data can better inform their trading strategies.
We provide the most comprehensive, robust, and high-quality energy data and analytics tools available, empowering companies and traders to navigate highly complex FTR markets.
If you’re interested in a demo of our FTR trading solution, request a demo, and one of our industry experts will be in touch.
