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NPRR 639

NPRR 639. The Minimum Current Exposure (MCE) calculation bases minimum collateralization on days of market activity. Simplified: MCE = Max( ((Load * 5 days – Generation * 5 days*.8) * SAF + Max(0 , Net Bilateral Sales * SAF * 2 days) ), (Generation * 2 days * .2 * SAF),

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NPRR 639

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  1. NPRR 639 The Minimum Current Exposure (MCE) calculation bases minimum collateralization on days of market activity. Simplified: MCE = Max( ((Load * 5 days – Generation * 5 days*.8) * SAF + Max(0, Net Bilateral Sales * SAF * 2 days) ), (Generation * 2 days * .2 * SAF), (Absolute value(Net DAM activity) * 1 day) ) SAF = Seasonal Adjustment Factor NPRR 639 proposes elimination of the highlighted Max(0). This would result in a credit where bilateral purchases exceeded bilateral sales. Situations can then arise where Counter-Parties with no load or generation will have negative collateral requirement ERCOT Public

  2. NPRR 639 ERCOT will comment revision to adjust the zero cap to allow some credit for bilateral purchases for Counter-Parties with bilaterals supporting load. This would require system changes. Simplified: MCE = Max( ((Load * 5 days – Generation * 5 days * 0.8) * SAF + (If Load = 0, then Max(0, Net Bilateral Trades * 2 days), else (Net Bilateral Trades * 5 days * NBCF))* SAF), (Generation * 2 days * 0.2 * SAF), (Absolute value(Net DAM activity) * 1 day) ) SAF = Seasonal Adjustment Factor NBCF = Factor that reduces offset for load hedged with bilateral trades In addition, ERCOT proposes specifying revision process for MCE parameters to allow revisions without an NPRR. ERCOT Public

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