Common use of Patterns of Ownership Clause in Contracts

Patterns of Ownership. The overall ownership structure of FTRs and the ownership of prevailing flow and counter flow FTRs is descriptive and is not necessarily a measure of actual or potential FTR market structure issues, as the ownership positions result from competitive auctions. In order to evaluate the ownership of prevailing flow and counter flow FTRs, the MMU categorized all participants owning FTRs in PJM as either physical or financial. Physical entities include utilities and customers which primarily take physical positions in PJM markets. Financial entities include banks and hedge funds which primarily take financial positions in PJM markets. International market participants that primarily take financial positions in PJM markets are generally considered to be financial entities even if they are utilities in their own countries. Table 13-9 presents the Monthly Balance of Planning Period FTR Auction cleared FTRs for 2016 by trade type, organization type and FTR direction. Financial entities purchased 81.7 percent of prevailing flow FTRs, up 4.2 percent, and 75.2 percent of counter flow FTRs, down 10.0 percent, for the year, with the result that financial entities purchased 78.6 percent, down

Patterns of Ownership. The overall ownership structure of FTRs and the ownership of prevailing flow and counter flow FTRs is descriptive and is not necessarily a measure of actual or potential FTR market structure issues, as the ownership positions result from competitive auctions. In order to evaluate the ownership of prevailing flow and counter flow FTRs, the MMU categorized all participants owning FTRs in PJM as either physical or financial. Physical entities include utilities and customers which primarily take physical positions in PJM markets. Financial entities include banks and hedge funds which primarily take financial positions in PJM markets. International market participants that primarily take financial positions in PJM markets are generally considered to be financial entities even if they are utilities in their own countries. Table 13-9 16 presents the Monthly Balance of Planning Period 2017 to 2020 Long Term FTR Auction market cleared FTRs for 2016 by trade type, organization type and FTR direction. Financial The results show that financial entities purchased 81.7 77.5 percent of prevailing flow FTRs, up 4.2 percent, buy bid FTRs and 75.2 84.9 percent of counter flow FTRs, down 10.0 percent, for the year, buy bid FTRs with the result that financial entities purchased 78.6 percent, down80.8 percent of all Long Term FTR Auction cleared buy bids for the 2017 to 2020 Long Term FTR Auction.