Executive Summary

Shams Siddiqi (representing Rainbow Energy) presented his long awaited rewrite of NPRR1088(Reduce Credit Requirements for Trading Only Entities) with an additional twist of classifying entities that only participate in DC Tie transactions as Trading Activity Only entities,  Bob Wittmeyer (representing Denton, I think) presented the latest version of NPRR1112(Reduce Maximum Unsecured Collateral) which got edited and passed, Seth Cochran (DC Energy) talked about his ideas for changing the Default Uplift Methodology, and Mark Ruane presented a couple of NPRRs tying up loose ends in securitization. 

AGENDA

• ERCOT Meeting Page

Notes

• Reduce Collateral for Trading Only Entities. Rainbow Energy (Shams Siddiqi) discussed a proposed change to the credit calculation for “Trading Activity Only” entities that would
  • Classify entities that only had DC Tie transactions as “Trading Activity Only”
  • Reduce the number of days of collateral (M1) to be held to 3 (from 10)
  • Remove the “Unbilled Real-Time Amount” (URTA) component from the trader only calculation -URTA is 9 days worth of the recent average daily real time transactions.
  • Account for the last seven days of activity instead of the last 5 days.
• NPRR1112(Reduce Max Unsecured Collateral to $30M) Originally this was $27.5M, but desktop edits today changed it to $30M.  NRG may submit comments to totally remove unsecured credit from entities that have defaulted.
• Changes to Default Uplift Methodology. DC Energy (Seth Cochran) decided after receiving feedback that a full “PJM-like” implementation was not supported by the community.  Their new thought is that all CRR activity in the Market Activity share calculation should be multiplied by a scalar to reduce its importance.  ERCOT committed to come back to the next meeting with analysis of the impacts of a 0.9, 0.8, and 0.7 scalar.
• Securitization.  ERCOT presented draft NPRRs that 1) clarify that people have to send their payments/deposits to the correct accounts and 2) introduce an escrow deposit for new participants as they enter the market.

Discussed Issues

• Reduce Collateral for Trading Only Entities
• NPRR1112(Reduce Max Unsecured Collateral to $30M)
• Changes to Default Uplift Methodology
• Securitization M
• Securitization N