NOTICE DATE:  February 3, 2012

NOTICE TYPE:  M-B020312-01 CRR

SHORT DESCRIPTION:  March 2012 Monthly CRR Auction

INTENDED AUDIENCE:  CRR Account Holders

DAYS AFFECTED:  February 3 - 15, 2012

LONG DESCRIPTION:  Credit Submission for the March 2012 Monthly CRR Auction will begin at 00:00:01 CDT on February 3, 2012 and will close at 17:00:00 CDT on February 10, 2012.

Per Section 7.5.2 (3) of the ERCOT Nodal Protocols, ERCOT will enforce a volume limitation of 10,000 market transactions (bids and offers) per account holder.  The CRR Auction Bid window opens at 00:00:01 CDT on February 13, 2012, and closes at 17:00:00 CDT on February 15. 2012.

Per Section 7.5.2(2)(e), if the total number of bids submitted for the auction exceeds the maximum number of transactions available for the market, currently 200,000, a second round of bid submissions will be required. CRR Account Holders will be notified via Operator Message. Account Holders whose bids and offers exceed the maximum number of allowable bids/offers determined for the second round will have their portfolios removed from the auction and will be required to resubmit a new portfolio with the total number of bids less than or equal to the second round bid limit.

Per Section 7.5.2(2)(a), prior to the opening of the auction bid window but after the credit lock deadline, the system will send a message to all account holders regarding  the available number of transactions for participating  account holders in the event of a second round bid. The preliminary allocated CRR transaction limit is 1029.

CRR Account Holders are not included in the CRR transaction volume limitation process if they do not own open CRR positions or they do not have credit allocated to the CRR Auction. Should a second round auction be necessary, the bid/offer limit will be recalculated after credit lock to accommodate only those CRR Account Holders who have open positions or have credit allocated to the auction.

This second auction, if needed, will be open from 18:00:00 CDT on February 15, 2012 until 17:00:00 CDT on February 16, 2012.

ADDITIONAL INFORMATION: The Baseload CRRs used for the February 2012 Monthly CRR Auction may be found in the Monthly Auction Notice folder on the CRR Market Information System (MIS) site at https://mis.ercot.com/pps/tibco/mis/Pages/Market+Information/CRR and on the CRR webpage of ERCOT.com at http://www.ercot.com/mktinfo/crr/.

Specifications for the equipment and interfaces necessary to participate in the CRR Auction are included in the CRR Market User Interface Specifications document, which may also be found on the CRR MIS site and on the CRR webpage of ERCOT.com.

The ERCOT Board-approved values for A and M as referenced in Nodal Protocols Section 7.5.5.3 (1) (a) (iii) are currently set at $0.75/MWh and 0 respectively.

Per Section 7.5.5.3(3)(b), ERCOT will review preliminary auction results to ensure that Counter-Parties have sufficient credit limit to cover post auction credit requirements. If a Counter-Party does not have sufficient credit limit for post auction credit requirements, ERCOT may send a collateral request that is due by 15:00 CPT on the next Bank Business Day. If sufficient collateral is not received by 15:00 CPT on the next Bank Business Day, ERCOT may set an associated CRR Account holder's credit limit to zero in the CRR application such that the Counter-Party's bids and negatively priced offers in the CRR Auction are voided and rerun the CRR Auction without that Counter-Party's activity. Collateral calls pursuant to section 7.5.5.3(3)(b) may be issued on a non-business day to minimize impact on CRR timelines.

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 the ERCOT CRR Team via email at [log in to unmask]<mailto:[log in to unmask]>.

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