NOTICE DATE:  November 6, 2012
NOTICE TYPE:  M-A110612-01 NPRR
SHORT DESCRIPTION:  Corrections to NPRR400
INTENDED AUDIENCE:  ERCOT Market Participants
DAY AFFECTED:  November 9, 2012
LONG DESCRIPTION:  On November 9, 2012, ERCOT will implement Nodal Protocol Revision Request (NPRR) 400, Eliminate Unsecured Credit for CRR Auctions and for Future Credit Exposure and Eliminate Netting of FCE with CCE.
NPRR400, which was approved by the ERCOT Board of Directors (Board) on October 18, 2011, requires that a) the Future Credit Exposure (FCE) component of the collateral calculation and b) the Congestion Revenue Right (CRR) Auction credit limit be collateralized with cash, letter of credit or a surety bond. Unsecured credit and unsecured credit through guarantees will no longer be available for CRR credit requirements.
During testing of the system parameters of NPRR400, it was discovered that the Protocol language was not aligned with the intent of the NPRR and that the language may result in certain scenarios in which Available Credit Limits for CRR Auctions (ACLC) and for the Day-Ahead Market (ACLD) may yield negative values. In addition, potential negative Remainder Collateral values may overstate collateral request amounts.
ERCOT has submitted NPRR497, Corrections to NPRR400, with a request for Urgent status to align the Protocols with the intent and systems implementation of NPRR400. However, ERCOT does not expect Board approval of NPRR497 until after the implementation of NPRR400. During this period, ERCOT will calculate ACLC and ACLD values in accordance with the intent and system parameters of NPRR400 irrespective of the Protocol language which may result in negative credit limit values or overstate collateral request amounts.
ADDITIONAL INFORMATION:  NPRR400 and associated documents can be found on the ERCOT website, under Market Rules, http://www.ercot.com/mktrules/issues/nprr/376-400/400/index.
NPRR497 and associated documents can be found on the ERCOT website, under Market Rules, http://www.ercot.com/mktrules/issues/nprr/476-500/497/index.
CONTACT:  If you have any questions, please contact Vanessa Spells at [log in to unmask]<mailto:[log in to unmask]>, (512) 225-7014 or Suresh Pabbisetty at [log in to unmask]<mailto:[log in to unmask]>, (512) 225-7244. You may also contact your ERCOT Account Manager, 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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