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MCWG Update to WMS. 6/13/2012. MCWG Update to WMS. General Update May 21 Special Meeting on NPRR 459 Held a special meeting on 5/21 to discuss NPRR 459. Comments were provided to WMS for their special meeting on the same date. May 30 Joint MCWG/CWG Meeting
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MCWG Update to WMS 6/13/2012
MCWG Update to WMS • General Update • May 21 Special Meeting on NPRR 459 • Held a special meeting on 5/21 to discuss NPRR 459. Comments were provided to WMS for their special meeting on the same date. • May 30 Joint MCWG/CWG Meeting • Reviewed proposed NPRRs for possible credit implications and provided comments to PRS. • NPRR 463 – CRR Auction Structure Enhancements was discussed in detail and it was determined that it would allow Market Participants to more efficiently manage their CRR Auction credit requirements without increasing risk. • Additional discussion on NPRR 459. • There was general consensus that the issues it is attempting to address are areas of concern, however there were requests for additional data and analysis to illustrate how the proposed changes to RTL calculation would be an improvement over the current methodology of a fixed forward risk multiplier of 1.5.
MCWG Update to WMS • May 30 Joint MCWG/CWG Meeting (Continued) • Path Specific CRR Collateral Requirements • Luminant presented a proposal for a path-specific methodology for collateralizing CRRs. • The proposal would still require that a CP collateralize the full notional value of the CRR prior to the auction. • CPs would only be required to pay for CRRs one month prior to flow, however they would still be required to collateralize the full notional amount of the owned CRRs for the entire term. This would allow CPs the option of using a LC to fulfill their collateral requirement for “forward” months. • They would also have to post a path-specific adder based on historical prices. • There was general consensus that a path-specific methodology more effectively mitigates risks associated with CRRs when compared to the current flat adder, but no recommendation was made on the specific proposal by Luminant. • This topic will be further discussed at the July MCWG meeting. • Review ACPE Parameters • ERCOT posed the question as to whether or not the current parameters were adequate, however the members felt that more feedback from ERCOT on the effectiveness of the current parameters was needed prior to giving a recommendation. • Next MCWG Meeting – June 27