Draft NPRR: Additional Counter-Party Criteria

1. Draft NPRR: Additional Counter-Party Criteria Mark Ruane Vice President, Credit and Enterprise Risk Management CWG/MCWG ERCOT Public June 26, 2013

2. Draft NPRR: Additional Counter-Party Criteria ERCOT has drafted an NPRR that specifies additional Counter-Party criteria in Protocol Section 16.11.4.1. Incorporation of the criteria is a condition of the exemption to certain provisions of the Commodity Exchange Act that was granted by the CFTC to the ISO/RTOs. The additional criteria must be in effect by September 30, 2013. Therefore ERCOT will request urgent status for this NPRR. ERCOT Public

3. Draft NPRR: Additional Counter-Party Criteria Under the CFTC Final Order, in order to be eligible for the exemption, Counter-Parties must be: • An Appropriate Person as defined in the Commodity Exchange Act, • An Eligible Contract Participant as defined in the Commodity Exchange Act, or • In the business of • Generating, transmitting or distributing electric energy, or • Providing electric energy services that are necessary to support the reliable operation of the transmission system. ERCOT Public

4. Draft NPRR: Additional Counter-Party Criteria Appropriate Persons include banks, insurance companies, governmental entities, broker-dealers, and certain business entities with a net worth exceeding $1 million or total assets exceeding $5 million. Eligible Contract Participants include financial institutions, business entities with total assets exceeding $10m, or net worth exceeding $1m and is hedging risk, governmental entities, Futures Commission Merchants, individuals with total assets greater than $10m, or $5m if hedging risk. ERCOT will expand the scope of ‘Attachment J: Annual Certification Form to Meet ERCOT Additional Minimum Participation Requirements’ to include certification that the Counter-Party is falls within the specified criteria. ERCOT Public

5. Draft NPRR: Additional Counter-Party Criteria Questions ERCOT Public