With the maturing of the PJM market, the need for the market to offer advanced, more flexible transmission rights has become necessary. The advanced financial transmission rights (FTR) have been recently proposed for the new PJM FTR market. The advanced FTRs includes long-term FTR and option FTR products, in addition to the forward FTR product introduced in April 1999. In this paper, main features of the new PJM market design are described. The LP-based framework for the advanced FTR auction market-clearing problem is presented and the marginal market clearing prices (MCP) for option FTRs are defined. Properties of the advanced FTR market are demonstrated using a 5-bus exemplar network and the realistic PJM market model.
