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Pre-Pay Account Updates Matthew Tozer ERCOT CWGW 9/23/2013

Pre-Pay Account Updates Matthew Tozer ERCOT CWGW 9/23/2013. What is Prepay?. Prepay is a mechanism used by market participants to pay for and receive funds from settlement invoices without the use of wires

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Pre-Pay Account Updates Matthew Tozer ERCOT CWGW 9/23/2013

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  1. Pre-Pay Account Updates Matthew Tozer ERCOT CWGW 9/23/2013

  2. What is Prepay? • Prepay is a mechanism used by market participants to pay for and receive funds from settlement invoices without the use of wires • Prepay money is categorized as market cash and has no effect on cash collateral or Available Credit Limit (ACL) • Market Participants and ERCOT benefit from a reduction in wire fees

  3. Current Prepay Process • Not Standardized: Market participants use prepay accounts differently • Protocols or Other Binding Documents don’t govern its use • Invoices due to ERCOT are paid with prepay funds the day invoices are posted • Manual process for ERCOT staff

  4. Future Prepay Process • Implement protocols and guidelines to create consistency among prepay accounts • Options will be: • Pay all invoices due to ERCOT from prepay • Hold all credit invoices in prepay • Both pay all invoices due to ERCOT and hold all credit invoices • Invoices due to ERCOT will be paid with prepay funds on the invoice due date based on the prepay survey sent to all market participants • Automate process for ERCOT staff • ERCOT legal staff will be reviewing the suggested changes which will be brought to CSWG/COPS before the NPRR is posted

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