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ERCOT Client Services <[log in to unmask]>
Thu, 1 Aug 2013 17:00:02 +0000
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NOTICE DATE:  August 1, 2013

NOTICE TYPE:  M-A080113-01 Legal

SHORT DESCRIPTION:  Counter-Party compliance with CFTC’s “appropriate persons” standard as contemplated in NPRR552, Additional Counter-Party Criteria.


DAY AFFECTED:  September 30, 2013

LONG DESCRIPTION:  On July 3, 2013, Electric Reliability Council of Texas, Inc. (ERCOT) submitted Nodal Protocol Revision Request (NPRR) 552, Additional Counter-Party Criteria, to incorporate the last exemption requirement of the Commodity Futures Trading Commission’s (CFTC’s) “Final Order on RTO and ISO Exemption for Certain Specified Transactions” - namely, that all applicable transactions must be entered into by persons who are either “appropriate persons” or “eligible contract participants” as defined in the Commodity Exchange Act (CEA), or that meet other conditions as defined in the Final Order.

The NPRR incorporates these requirements into the ERCOT Protocols and mandates an annual certification by Counter-Parties that they are in compliance.  The Protocol Revision Subcommittee (PRS) recommended approval of NPRR552 at its July 18, 2013 meeting.  ERCOT anticipates a Technical Advisory Committee (TAC) recommendation at its September 5, 2013 meeting and subsequent ERCOT Board of Directors consideration and approval of NPRR552 at its September 17, 2013 meeting.

Since the CFTC’s No-Action Relief ends on September 30, 2013, ERCOT will require that all Counter-Parties be in compliance with the additional requirements in NPRR552 by that date.  As such, Counter-Parties are strongly encouraged to submit the Annual Certification Form in advance of the September 30th deadline, confirming that they meet the allowable contract participant standard in NPRR552.  Thus, ERCOT will accept in advance any Annual Certification Forms by Counter-Parties, contingent upon ERCOT Board approval of NPRR552 at its September 17, 2013 meeting.

ACTION REQUIRED: Attachment A to this Notification is Protocol Section 22 Attachment J, Annual Certification Form incorporating modifications proposed in NPRR552.  Each Counter-Party must submit to ERCOT a notarized certificate, signed by an officer or executive with authority to bind the Counter-Party, in the form of Attachment A to this Notification.  The Annual Certification Form should be provided as soon as possible and in all cases no later than September 30, 2013.

Note that this certification is in addition to the required annual certification of risk management capabilities as described in Protocol Section 16.16.2, which must be received by ERCOT no later than 120 days after the close of the fiscal year of the Counter-Party or its guarantor. After the initial compliance deadline of September 20, 2013, it is anticipated that the two certifications would be made simultaneously.

Failure to submit the Annual Certification Form by September 30, 2013 will result in ERCOT taking remedial action (e.g., material breach) on the following day as authorized under the Standard Form Market Participant (MP) Agreement, the ERCOT Protocols and/or the Public Utility Regulatory Act (PURA).

Please forward the Annual Certification Form to: [log in to unmask]<mailto:[log in to unmask]> with the original document sent to:


7620 Metro Center Dr.

Attn: Kevin Pearcy

Austin, TX 78744

PHN: 512 225 7029

CONTACT:  If you have any questions, please 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]<mailto:[log in to unmask]>.

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