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NOTICE DATE: June 20, 2023

NOTICE TYPE: W-A062023-01 Settlements/Financial/Credit

SHORT DESCRIPTION: Removal of ERS charges from TPE

INTENDED AUDIENCE: All Counter-Parties

DAYS AFFECTED: June 16-19, 2023

LONG DESCRIPTION: Under section 16.11.4.1(3) of the ERCOT Protocols, ERCOT removed Emergency Response Service (ERS) charges from Total Potential Exposure (TPE) on the evening of June 19, 2023, which was four days later than normal.

ERS charges for each of the contract periods (four times per year) are billed/settled on the Real Time Market (RTM) Final Statement (RTM finals). ERS charges impact TPE/ Estimated Aggregate Liability (EAL) through the Unbilled Final Amounts (UFA). The UFA estimates the amount of final charges or credits that a Counter-Party will be billed in the future. The average RTM finals amount is extrapolated over 55 days because RTM finals have 55-day resettlements. Because ERS charges/credits are non-recurring charges within the TPE period, their inclusion in UFA distorts the RTM finals average and results in a substantially higher UFA. This could ultimately lead to higher TPE and collateral requirements. To eliminate the impact of these ERS charges/credits, ERCOT has historically removed the specific day RTM finals statement, which subtracts these ERS charges/credits from the UFA calculation. Inconsistent with its historical practice, ERCOT did not make this adjustment on June 15, 2023, but did so on the evening of June 19, 2023. ERCOT later published revised credit reports in the Market Information Systems (MIS).

CONTACT: If you have any questions, please send an email to [log in to unmask]">[log in to unmask] or contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at [log in to unmask]">[log in to unmask].

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