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NOTICE DATE: April 9, 2014

NOTICE TYPE: M-A040914-01 CRR

SHORT DESCRIPTION: 2014.2nd6.AnnualAuction.Seq1 CRR Auction

INTENDED AUDIENCE: CRR Account Holders

DAYS AFFECTED: April 9 – May 1, 2014

LONG DESCRIPTION: Credit Submission for the 2014.2nd6.AnnualAuction.Seq1 Congestion Revenue Right (CRR) Auction began at 00:00:01 CPT on April 9, 2014, and will close at 17:00:00 CPT on April 28, 2014.

Per Section 7.5.2(2)(b) of the ERCOT Protocols, ERCOT will enforce a volume limitation of 2,000 market transactions (bids and offers) per account holder. The CRR Auction Bid window opens at 00:00:01 CPT on April 29, 2014, and closes at 17:00:00 CPT on May 1, 2014.

Per Section 7.5.2(2)(e), if the total number of market transactions submitted for the auction exceeds the maximum number of transactions available for the market, currently 200,000, CRR Account Holders will be notified via Operator Message that a transaction adjustment period (second round of submissions) will be required. Account Holders whose total bids and offers exceed the maximum number of allowable transactions determined for the transaction adjustment period will have their portfolios removed from the auction and will be required to resubmit a new portfolio with the total number of transactions less than or equal to the transaction adjustment period limit. The preliminary allocated CRR transaction limit is 951.

Note that “24-Hour” Time of Use bids are not available for any CRR Auction held as part of a Long-Term Auction Sequence; only PeakWD, PeakWE, or Off-peak can be specified for Time of Use.

Per Section 7.5.2(2)(a), prior to the opening of the auction bid window but after the credit lock deadline, the CRR system will send a message to all account holders regarding the available number of transactions for participating account holders in the event of a transaction adjustment period. 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 transaction adjustment period 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.

The transaction adjustment period bid window, if needed, will be open from 18:00:00 CPT on May 1, 2014, until 17:00:00 CPT on May 2, 2014.

Per Section 7.5.3(5), on April 24, 2014, ERCOT will post the Annual Path Specific Adders report for the 2014.2nd6.AnnualAuction.Seq1 CRR Auction on the CRR Page on the MIS and on the CRR Page on ERCOT.com.

Results for the 2014.2nd6.AnnualAuction.Seq1 CRR Auction will be posted to the Market Information System (MIS) on May 15, 2014, as indicated on the CRR Activity Calendar. A Market Notice will be sent if the results are posted on a different date.

ADDITIONAL INFORMATION: The Baseload CRRs used for the 2014.2nd6.AnnualAuction.Seq1 CRR Auction may be found in the Annual Auction Notice folder on the CRR Page on the MIS and on the CRR Page on ERCOT.com.

Specifications for the equipment and interfaces necessary to participate in the CRR Auction are included in the CRR Market User Interface Specifications document, which is located on the CRR Page on the MIS and on the CRR Page on ERCOT.com (note that the CRR application currently supports Internet Explorer (IE) version 6, 7, or 8 and Java Runtime Environment (JRE) 1.6). IE Configuration Guides are located on the User Guides Page on ERCOT.com, under Public Data. Bids and Offers may be submitted in increments of one-tenth (.1) MW. The minimum Option bid price is $.01.

Per Section 7.5.5.3(4), ERCOT may review preliminary auction results to ensure that Counter-Parties have sufficient credit limits to cover post auction credit requirements. If a Counter-Party does not have a 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(4)(a) may be issued on a non-Business Day to minimize impact on CRR timelines.

Per Section 7.5.1(3)(b), ERCOT’s methodology for deriving the CRR Auction Load distribution factors for this part of the CRR Long-Term Auction Sequence is in accordance with the ERCOT Load distribution factor methodology specified in Section 4.5.1(5), for use in the Day-Ahead Market (DAM).

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].

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