PJM Interconnection, which manages the electric grid from New Jersey to North Carolina and as far west as Illinois, issued a news release today on an $80 million default in the wholesale electricity market by Power Edge LLC. Another participant, Exel Power Sources LLC, defaulted on a $4.5 million payment, PJM said.

Power Edge had purchased "financial transmission rights," one of myriad pieces of the wholesale market that PJM has created by slicing and dicing the basic process of generating electricity, shipping it to a certain location and selling it to distributors. FTRs are ways for financiers as well as power companies to bet on "congestion" charges that PJM levies in the summertime when transmission lines get clogged up by too much demand. If you own an FTR for a certain line at a certain time and there is congestion, you make money. In Power Edge's case, PJM says, the financial products were "counterflow" FTRs, which pay off when "the flow of power on a transmission line flows in the opposite direction of a transmission constraint."

No word about what Power Edge's problems might be. They don't even seem to have a Web site. Apparently, however, the company couldn't get bankers to extend credit to pay its bills.