NOTICE DATE:  May 13, 2015

NOTICE TYPE:  M-C051315-01 Financial/Credit

SHORT DESCRIPTION:  Implementation details of NPRR597, Utilize Initial Estimated Liability (IEL) Only During Initial Market Activity and NPRR601, Inclusion of Incremental Exposure in Mass Transitions to Counter-Parties that are Registered as QSEs and LSEs and Provide POLR Service

INTENDED AUDIENCE:  ERCOT Counter-Parties

DAY AFFECTED:  June 13, 2015

LONG DESCRIPTION:  On June 13, 2015, ERCOT will implement Nodal Protocol Revision Request (NPRR) 597, Utilize Initial Estimated Liability (IEL) Only During Initial Market Activity, which was approved by the ERCOT Board on June 10, 2014.

This NPRR clarifies that the IEL is to be used only during the first 40 days of a Counter-Party’s activity in the ERCOT markets. The IEL component of the Estimated Aggregate Liability (EAL) calculation is the initial estimated calculation used for a new Counter-Party in the ERCOT market.

In addition, on June 13, 2015, ERCOT will implement NPRR601, Inclusion of Incremental Exposure in Mass Transitions to Counter-Parties that are registered as QSEs and LSEs and Provide POLR Service, which was approved by the ERCOT Board on June 10, 2014.

This NPRR revises the Estimated Aggregate Liability (EAL) component of Total Potential Exposure (TPE) calculation to capture credit exposure for Counter-Parties that provide Provider of Last Resort (POLR) services as a result of Mass Transition of a defaulting Counter-Party with load.

ADDITIONAL INFORMATION:  Pursuant to Protocols Section 21.6, Nodal Protocol Revision Implementation, ERCOT is required to provide notice as soon as practicable, but no later than ten days prior to implementation.

NPRR597 and associated documents can be found on the ERCOT website.

NPRR601 and associated documents can be found on the ERCOT website.

NPRR601-related updates to the EAL Summary Report and EAL Details Report templates can be found under Key Documents for the May 20, 2015 CWG/MCWG meeting on the ERCOT website at http://www.ercot.com/calendar/2015/5/20/54547-CREDITWG-MCWG.

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].

If you are receiving email 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.

sa