1. ©2004 PJM www.pjm.com 1 STATE OF THE MARKET REPORT 2003 Joseph E. Bowring Manager PJM Market Monitoring Unit FERC Briefing Washington, D.C. April 14, 2004

2. ©2004 PJM www.pjm.com 2 State of the Market Conclusions Energy market results were competitive Capacity market results in PJM Mid-Atlantic Region were competitive Capacity market in PJM Western Region – no functioning competitive market Regulation market results were competitive Spinning market results were competitive FTR market results were competitive

3. ©2004 PJM www.pjm.com 3 2003 PJM Average Hourly Load and Spot Market Volume

4. ©2004 PJM www.pjm.com 4 Average PJM Aggregate Supply Curves: June to September 2002 and 2003

5. ©2004 PJM www.pjm.com 5 PJM Peak Load Comparison: Friday, August 22, 2003, and Wednesday, August 14, 2002

6. ©2004 PJM www.pjm.com 6 PJM Average Hourly Locational Marginal Prices (in Dollars per MWh)

7. ©2004 PJM www.pjm.com 7 PJM Load-Weighted, Average LMP (in Dollars per MWh)

8. ©2004 PJM www.pjm.com 8 PJM Load-Weighted, Fuel-Cost-Adjusted LMP (in Dollars per MWh)

9. ©2004 PJM www.pjm.com 9 Load-Weighted Average Monthly LMP: Real-Time Market

10. ©2004 PJM www.pjm.com 10 Natural Gas Cash Prices

11. ©2004 PJM www.pjm.com 11 Type of Fuel Used by Marginal Units

12. ©2004 PJM www.pjm.com 12 PJM Average Monthly Load

13. ©2004 PJM www.pjm.com 13 Price Duration Curve Hours Above the 95 th Percentile

14. ©2004 PJM www.pjm.com ©2003 PJM Load Duration Curve

15. ©2004 PJM www.pjm.com 15 Average All-In Market Price

16. ©2004 PJM www.pjm.com 16 PJM Average Hourly System LMP

17. ©2004 PJM www.pjm.com 17 PJM Hourly Energy Market HHI: 2003

18. ©2004 PJM www.pjm.com 18 PJM RSI Index Duration Curve: 2002-2003

19. ©2004 PJM www.pjm.com 19 Average Monthly Load-Weighted Markup Indices

20. ©2004 PJM www.pjm.com 20 PJM Mid-Atlantic Region’s Capacity Obligations: January through May 2003

21. ©2004 PJM www.pjm.com 21 PJM Capacity Obligations: June through December 2003

22. ©2004 PJM www.pjm.com 22 PJM Daily and Monthly Capacity Credit Market Performance: January 2000 through December 2003

23. ©2004 PJM www.pjm.com 23 Estimated Net Revenue Combustion Turbine

24. ©2004 PJM www.pjm.com 24 Equivalent Forced Outage Rates

25. ©2004 PJM www.pjm.com 25 Queued Capacity by In-Service Date

26. ©2004 PJM www.pjm.com 26 Average Real-Time Offer-Capped Units (by Month)

27. ©2004 PJM www.pjm.com 27 Percent of Real-Time Offer-Capped MW (by Month)

28. ©2004 PJM www.pjm.com 28 PJM Real-Time Imports and Exports: 2003

29. ©2004 PJM www.pjm.com 29 Annual Zonal LMP Differences: Reference to Western Hub

30. ©2004 PJM www.pjm.com 30 ARR and FTR Congestion Hedging