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Market Credit Working Group Update to WMS

Market Credit Working Group Update to WMS. Wed. February 17, 2010. MCWG Meetings Since January Update. January 18, 2010, at Reliant’s offices (face-to-face + Webex) January 22, 2010 at Luminant’s offices (face-to-face + Webex) January 25, 2010 (face-to-face + Webex)

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Market Credit Working Group Update to WMS

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  1. Market Credit Working Group Update to WMS Wed. February 17, 2010

  2. MCWG Meetings Since January Update • January 18, 2010, at Reliant’s offices (face-to-face + Webex) • January 22, 2010 at Luminant’s offices (face-to-face + Webex) • January 25, 2010 (face-to-face + Webex) • February 1, 2010 (face-to-face + Webex)

  3. MCWG February 2010 Overview • DAM Collateral Requirements –NPRR 206 • Update on the endorsed DAM NPRR: • Expanded loss mutualization for entire market AND accelerated DAM • Update on Short-Pay Fund • 2010 Goals (and parking lot)

  4. DAM Collateral Requirements • NPRR 206 approved by TAC • To BOD Tuesday February 16, 2010 • CWG reviewed on February 12, 2010 • NPRR206 does have a credit impact that can’t be fully quantified at this time. NPRR206 establishes the framework for ERCOT credit staff to establish appropriate Day-Ahead Market (DAM) collateral requirements for Market Participants. The framework established by NPRR 206 has been proposed prior to completion of the process to determine the factors to meet ERCOT nodal system deadlines. Development of the process to determine the factors will begin shortly within the guidelines provided by the TAC approved version of NPRR 206. CWG will 1) participate with the Market Credit Working Group (MCWG) to develop the “e” factor process and will 2) provide a credit impact analysis to F&A along with TAC’s recommendation to the Board on variables and ‘e’ factors and/or processes. It is CWG’s understanding that the process to establish “e” factors will be approved by the Board.

  5. DAM Collateral Requirements • MCWG will continue work on the ‘e’ factor at the meeting on Friday, February 19, 2010 • CWG has been invited to participate. • Timing for completion is prior to March 2010 WMS meeting

  6. Draft NPRR Status • One NPRR has been drafted • Expanded loss mutualization for entire market AND accelerated DAM • Shams has drafted the draft NPRR and the NPRR has been circulated for review

  7. Update on Short-Pay Fund • Open issue is crafting a short-pay fund that allows for participants to maintain an ownership interest in the fund as well as initial funding • Clayton has been tasked with setting-up a subgroup to take on this issue • Clayton has prepared a discussion paper • Expectation is that a proposal will be available for WMS for March 2010

  8. MCWG Parking Lot for 2010 • Direction of invoice timing change • Perform bottom up review of existing creditworthiness standards (after CCRO Best Practices efforts) • Reduction of settlement cycle due to PRR 568 (7days) • Further reductions in settlement cycles • This includes looking at the potential to reduce the settlement cycle 30% with improved metering

  9. Next Meeting ~MCWG • Meeting Friday February 19, 2009, 9:30 AM -12:30 CST (in person + Webex) • ‘e’ factor is the topic of discussion

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