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How is “location” considered in the commodity price forecast?
ICF develops commodity price forecasts using a system-wide modeling framework for the PJM RTO, with price formation driven by supply-demand fundamentals across the broader market footprint. The model represents the RTO at a zonal level, incorporating forecasted load growth within each zone and determining the corresponding quantity and type of generation required to maintain reliability. Commodity prices for energy, capacity, and fuel are then endogenously derived as the levels necessary to attract sufficient resources to meet projected demand across the system.
Because the PJM RTO is modeled as an integrated market, the Dominion Zone is not evaluated in isolation, but rather as part of the broader regional supply-demand balance. Accordingly, zonal price outcomes reflect both local conditions and interactions with the wider system, including transmission constraints and resource adequacy requirements across PJM. Given that the model operates at a zonal level of granularity, generation and load are represented on an aggregated basis within each zone. Therefore, nodal-level price formation is not required for purposes of the base commodity forecast, as such forecasts are intended to support long-term planning rather than capture localized dispatch or congestion effects at individual nodes.