NPRR1088 Reduce Credit Requirements for Traders - CIMView

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NPRR1088 Reduce Credit Requirements for Traders

Table of Contents

The Gist

NPRR1088 would adjust credit/collateral requirements.  A little background first.  The current (extremely complicated) calculations used to determine the collateral required to participate in the ERCOT market include Forward Adjustment Factors that are the average North Hub price in ICE for the next three weeks divided by the recent average price of the North Hub in ERCOT markets.  This Forward Adjustment Factor is calculated for Day Ahead Prices and Real-Time Prices and applied to a maximum of the average of the past 20 days worth of invoices (and that’s the simplified explanation!). 

The original version of NPRR1088 filed by Great Oaks Capital called for the Forward Adjustment Factors to not be applied to the Real Time Liability Extrapolated calculations (the size of your average invoice multiplied by how many days it would take to mass transition your customers, more or less) and instead apply it to the credit calculations for your bids and offers.  Shams Siddiqui then sent an unfiled edit to the MCWG mail list the reapplies the Forward Adjustment Factors to the Real Time Liability Extrapolated calculation (and other similar calculations), but reduces the number of days of average invoices to be collateralized to 5 (from about 14) and reduces the invoice averaging period to 2 days from its current 14, but only for traders (QSEs that don’t have load or gen)  

Important Actions

  • 7/6/21 Great Oaks Capital submits NPRR1088
  • 9/20/21 Shams Siddiqi submits edited version to MCWG
  • 11/11/21 Shams commits to submitting a new version of the NPRR, as the edits on top of edits are too confusing to read.  This NPRR will have a new number
  • 2/16/22 Shams (for Rainbow) presents his draft NPRR that would 
    • Allow entities whose only “load” transactions were DC Tie exports to be classified as Trading Activity Only (TAO) entities
    • Reduce the number of days collateral (M1) to be held for TAOs to 3 from 10.
    • Remove the Unbilled Real-Time Amount (URTA) component from the TAO 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 five days of activity.

Related Topics



Meeting Notes

3/14/22 CWG MCWG

2/16/22 CWG MCWG

1/19/22 CWG MCWG

11/11/21 CWG MCWG

10/20/21 CWG MCWG

10/6/21 WMS


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