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Credit update

Review of CWG activities over the last six months and planned initiatives for the next six months, encompassing updates on creditworthiness standards, chair election, involvement in Oliver Wyman project, BOD presentations, guarantees discussion, risk mitigation research, and more.

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Credit update

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Presentation Transcript

  1. Credit update • CWG activity over the last six months • CWG activity for upcoming six months • Upcoming BOD credit presentations • CWG discussion re: guarantees

  2. CWG activity over the last six months • Involved with OW project • Provided input to RFP Scope of Work • Provided feedback on respondents • Met for two full day sessions to review assumptions and provide input for modeling • Subgroup researched other risk mitigation measures • Updated Creditworthiness Standards • Updated CWG Charter • Reviewed PRRs and NPRRs for credit implications

  3. CWG activity for upcoming six months • Election of new Chair and Vice Chair • Ongoing involvement in Oliver Wyman project • Review preliminary results in January – date TBD • Review Nodal credit requirements for CRRs in light of PJM event • Subgroup researching other risk mitigation measures - ongoing • Updated Creditworthiness Standards - ongoing

  4. Upcoming BOD credit presentations • Jan 14th or Feb 18th – as part of BOD Nodal review, will discuss credit approach for Nodal • Feb 6th - F&A Committee to review OW results • Feb 19th - Expect to present OW results to full BOD at their meeting

  5. CWG discussion re: guarantees • General consensus that • Some amount of discount should be applied to guarantees • Believe results of OW capital adequacy study would be helpful in determining “how much” • Guarantee form should • Allow an evergreen feature • Not preclude an “unlimited” guarantee • Discussed a requirement that all entities that have a parent entity should provide some level of guarantee above the EAL requirement • For “close out” costs • For potential future exposure

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