On February 20, 2018, FERC approved PJM Interconnection,
L.L.C.'s ("PJM") proposal to, among other things, (1)
eliminate biddable points at zone nodes, certain generator nodes,
certain aggregate nodes, and individual load zones for Increment
Offers ("INCs") and Decrement Bids ("DECs") and
instead align the eligible trading points for INCs and DECs with
nodes where generation, load, or interchange transactions are
settled, or at trading hubs where forward positions can be taken;
and (2) allow trading of Up-to-Congestion transactions
("UTCs") at hubs, residual metered load, and interfaces,
but not at individual nodes.
In its filing, PJM explained that virtual transactions include
INCs, DECs, and UTCs. PJM further explained that market
participants can use virtual transactions to arbitrage price
differences between the day-ahead and real-time markets and hedge
exposure to physical positions. PJM stated that, by allowing
market participants without physical assets to
