Credit update

1. Credit update • CWG activity over the last six months • CWG activity for upcoming six months • Upcoming BOD credit presentations • CWG discussion re: guarantees

2. CWG activity over the last six months • Involved with OW project • Provided input to RFP Scope of Work • Provided feedback on respondents • Met for two full day sessions to review assumptions and provide input for modeling • Subgroup researched other risk mitigation measures • Updated Creditworthiness Standards • Updated CWG Charter • Reviewed PRRs and NPRRs for credit implications

3. CWG activity for upcoming six months • Election of new Chair and Vice Chair • Ongoing involvement in Oliver Wyman project • Review preliminary results in January – date TBD • Review Nodal credit requirements for CRRs in light of PJM event • Subgroup researching other risk mitigation measures - ongoing • Updated Creditworthiness Standards - ongoing

4. Upcoming BOD credit presentations • Jan 14th or Feb 18th – as part of BOD Nodal review, will discuss credit approach for Nodal • Feb 6th - F&A Committee to review OW results • Feb 19th - Expect to present OW results to full BOD at their meeting

5. CWG discussion re: guarantees • General consensus that • Some amount of discount should be applied to guarantees • Believe results of OW capital adequacy study would be helpful in determining “how much” • Guarantee form should • Allow an evergreen feature • Not preclude an “unlimited” guarantee • Discussed a requirement that all entities that have a parent entity should provide some level of guarantee above the EAL requirement • For “close out” costs • For potential future exposure