Two big topics dominated the discussion at today’s CWG/MCWG meeting. First up was NPRR1112 (eliminating unsecured credit). Public power came out strongly against this NPRR. The need was hotly debated, and it was tabled, probably to be amended to be a lowering of the unsecured credit cap (currently at $50M). Stay tuned for next month’s meeting. The second big topic was a rework of the Default Uplift Methodology to make it very “PJM-like”. Most seemed to feel this was a good idea, with the notable exception of Shams Siddiqi who felt it would push participants back into submitting schedules rather than bidding in their gen/load.
In other news, ERCOT presented data on NPRR1067 (releasing excess locked collateral two days after bid window close) showing that it was releasing about 20% of the locked collateral on average.
NPRRs 1099(move resource nodes under certain special circumstances), 1092 (Reduce RUC offer floor and remove opt out option), 1102 (ERCOT can adjust non IDR meter backcast profiles if needed), 1111 (Intermittant Renewable Resources behind Generic Transmission Constraints have to obey basepoints even if they are not being constrainted), and 1113 (No double counting of CLR provided RegUp in AS Imbalance calculation) were all deemed operational
NPRR1112 (Remove Unsecured Credit) generated a *lot* of discussion. ERCOT (Mark Ruane) is strongly for this NPRR and public power (munis/co-ops) are strongly against it. Most other participants sat on the sidelines with the exception of Morgan Stanley (Clayton Greer) who feels it isn’t needed and NRG (Bill Barnes) who feels that after the Rayburn and Brazos experience we can no longer assume that public power will always pay their bills. Public power pointed out that of the total defaulted amount due to Uri a maximum of $100M of that was due to unsecured credit ($100 M cap would be assuming Rayburn and Brazos both used the maximum amount of unsecured credit). ERCOT and NRG pointed out that currently there is a total of about $350M of unsecured credit in the ERCOT market, so that is a big deal. A compromise position of a lower (than $50M) cap was proposed, the NPRR was tabled and the compromise will be discussed at the next meeting.
NPRRXXXX (Make Default Uplift PJM-like, no number yet) was presented by Seth Cochran of DC Energy with supporting data provided by ERCOT (Austin Rosel). There were some for this proposal and some against (in particular, Shams Siddiqi of Crescent feels that it will push people to putting in generation/load schedules rather than bids). Most people seemed to agree that the current default uplift method puts too much of the burden on CRR Account holders (roughly %50, as opposed to about %10 under the PJM-like proposal)
NPRR867 ERCOT (Donald House) presented data saying that the implementation of NPRR867 has resulted in approximately a 20% reduction in collateral held by the CRR auctions (due to excess locked collateral being proactively released to other markets two days after the close of the CRR bid window).
ERCOT will present NPRR1067 (entry requirements/continued participation requirements)at the next meeting.
Shams will present NPRR1088 (adjusting credit requirements for traders) at the next meeting