NOTICE DATE:  July 25, 2012
NOTICE TYPE:  W-A072512-01 Financial/Credit
SHORT DESCRIPTION:  Notice of SAFM for implementation of NPRR459
INTENDED AUDIENCE:  Counter-Parties and QSEs
DAY AFFECTED:  August 1, 2012

LONG DESCRIPTION:  On August 1, 2012, ERCOT will implement Nodal Protocol Revision Request (NPRR) 459, Better Matching Forward Collateralization with Forward Risk in the Real-Time Market, which was approved by the ERCOT Board on July 17, 2012. NPRR459 requires ERCOT to provide notice of the Seasonal Adjustment Factor Monthly (SAFM) at least annually. The SAFM is a component of the Average Daily Transaction Extrapolated (ADTE) of the Estimated Aggregate Liability (EAL) calculation.

EAL = Max [IEL during the first 40-day period, Max (ADTE during the previous 40-day period)] + OUT + PUL + DALE

Below are the SAFM factors for 2012, beginning with August 2012.
MONTH

MONTHLY AVG PRICE

ANNUAL AVG PRICE

SAFM

AUG 2012

126.43

42.07

1.5025

SEP 2012

35.11

42.07

0.9575

OCT 2012

27.3

42.07

0.9125

NOV 2012

27.21

42.07

0.9125




The SAFM factors above, and a reduction in the Max ADTE look back period from 60 days to 40 days, will be effective starting August 1, 2012.

ACTION REQUIRED:  Counter-Parties should review their EAL Summary credit report on the ERCOT Market Information System (MIS) on August 1, 2012.

ADDITIONAL INFORMATION:  Pursuant to Protocol Section 16.11.4.3, the SAFM is to be updated and a Market Notice issued at least annually by ERCOT.
CONTACT:  If you have any questions, please contact Vanessa Spells at (512) 225-7014 or Rizaldy Zapanta at (512) 225-7015. Please send credit inquiries to [log in to unmask]<mailto:[log in to unmask]>. 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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