NOTICE
DATE: October 31, 2008
NOTICE
TYPE: M-A092408-02
General
SHORT
DESCRIPTION: ERCOT Receives Initial
Distribution of Funds from The Reserve
INTENDED
AUDIENCE: All ERCOT Market
Participants
DAY
AFFECTED: October 31, 2008
LONG
DESCRIPTION: The Electric Reliability
Council of Texas, Inc. (ERCOT), grid operator for most of the state, today
received an initial distribution of $24.3 million from The Reserve, a major
money-market investment management company.
“This
further confirms that ERCOT’s investments are secure,” CEO Bob Kahn said.
“We are committed – with the Public Utility Commission’s backing – to
ensuring the continued liquidity of the ERCOT
market.”
ERCOT has maintained funds
in money market mutual funds controlled by The Reserve, including the Primary
Fund and the U.S. Government Fund. On Monday, September 15, 2008, the day
after the bankruptcy of Lehman Brothers Holdings, Inc., it became known that
approximately 1.2% of the Primary Fund assets were Lehman securities, which
triggered a high level of redemption request for The Reserve’s funds. On
September 16, 2008, ERCOT delivered a letter requesting that The Reserve
immediately close all of its investment accounts with The Reserve; and ERCOT has
received confirmation of this redemption order from The Reserve.
Based on the information known at this time,
ERCOT expects a full recovery of all of its and its members’ funds invested in
The Reserve’s funds due to the priority of its redemption request; however, the
timing of full recovery is still unknown.
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
e-mail at [log in to unmask].
If you
are receiving e-mail from an ERCOT distribution list that you no longer wish to
receive, please follow this link in order to unsubscribe from this list:
http://lists.ercot.com.