Components of the Market Price

The hourly market price is calculated based on these components:

• Marginal energy costs: PJM provides a Day-Ahead Price Forecast based on the value of generation, transactions with the PJM Interconnection Association, and two-party transactions with other companies.
• Loss adjustment factor: Adjusts the total marginal costs to account for losses between the generator and the customer's meter.
• Market adjustment factor: To encourage customer response to prices, this factor provides a 25% margin on incremental and decremental sales. The market adjustment factor is included in the transmitted hourly prices, and applies to all energy sales.

For additional information, call 800-220-9991.