Financial Markets

The Financial Markets

The NYISO’s financial markets are important in increasing liquidity and improving market efficiency. TCCs are auctioned competitively and allow purchasers to lock-in a congestion cost payment. While TCCs can be purchased by entities that do not serve load, they help fulfill the FERC requirement of providing “firm” transmission service.

The virtual market allows participants to arbitrage the difference between day-ahead and real-time prices. Virtual bidding has been shown to increase market efficiency.

Key Energy Terms

Transmission Congestion Contracts (TCC)

The owner of a TCC is entitled to receive (or obligated to pay) the difference in the LBMP congestion component between the source and sink of the contract.

Virtuals

Participants effectively buy (or sell) power at the day-ahead price and then sell (or buy) it back at the real-time price without having to actually produce or take delivery of the power.