Legacy Financial Transmission Rights and their Function and Role they Play during the Financial Transmission Rights Auction

The Financial Transmission Rights Market is a mechanism used by the Market Participant for hedging against the Day Ahead Market energy price differences across a Path caused by the congestion cost charges that affects the Local Marginal Price. This paper delves into the beginning and creation of the Mexican Market of Financial Transmission Rights, FTR main characteristics, considerations relating to the assignment of the Legacy FTRs and the current situation of the Financial Transmission Rights Market, this is directly connected to the Mexican Wholesale Electricity Market.