NOTICE DATE: May 13, 2022
NOTICE TYPE: M-B051322-01 - Financial / Credit
SHORT DESCRIPTION: Estimated Subchapter N Securitization Escrow Deposit Requirements
INTENDED AUDIENCE: ERCOT Counter-Parties - specifically Qualified Scheduling Entities (QSEs) representing obligated Load Serving Entities (LSEs)
DAYS AFFECTED: May 13, 2022
LONG DESCRIPTION: ERCOT is currently expecting to close on PURA Subchapter N Securitization financing in mid-June 2022. Upon closing, provisions of Protocol Section 27, Securitization Uplift Charges, will be applicable.
ERCOT highlights the following information regarding Securitization Uplift Charges:
- Protocol Section 27 requires Counter-Parties (CPs) to, at all times, maintain Securitization Uplift Charge escrow deposits at or above the amount of the CP’s Load-Allocated Securitization Uplift Charge Credit Exposure (LASUCCE).
- Each CP is required to maintain any required Securitization Uplift Charge escrow deposit in a form acceptable to ERCOT, specifically cash or an unconditional, irrevocable letter of credit naming Texas Electric Market Stabilization Funding N LLC (TEMSFN) as the beneficiary.
Estimates of Securitization Uplift Charge Escrow Deposits
- In order to facilitate Counter-Parties’ provision of Securitization Uplift Charge escrow deposits in a timely manner, ERCOT will be providing initial estimates of Counter-Party required escrow deposits.
- On May 16, 2022, estimated Subchapter N Securitization Uplift Charge escrow deposits will be provided to affected Counter-Parties.
- The estimates will be determined based on Protocol Section 27.5.4, Determination of Securitization Uplift Charge Credit Exposure for a Counter-Party. Load data for the month of April 2022 will be used for the calculation of Counter-Party Monthly QSE Non-Opted-Out LSE Load Ratio Share (CPMQSELSELRScp,om,las). The estimated value used for the Monthly Total of Securitization Uplift Charge Daily Amounts (MTSUCDA) is $14,000,000.00.
Initial Securitization Uplift Charge Escrow Deposits
- On June 6, 2022, ERCOT expects to provide Securitization Uplift Charge escrow deposit requirements using May 2022 Load Ratio Share data and an updated value for MTSUCDA. These values will be considered “live” and supersede estimates provided on May 16, 2022. To the extent that any Securitization Uplift Charge escrow deposits made prior to June 6, 2022 are insufficient, this will be communicated to Counter-Parties via a CMM collateral request notice. To avoid Payment Default, Securitization Uplift Charge escrow deposits must be provided no later than 1500 CPT on June 8, 2022.
- Note that all dates are subject to change depending on the progress of securitization Subchapter N funding activities. Any change in timing will be communicated to Counter-Parties in a Market Notice.
Standard Form Letter of Credit to Satisfy Securitization Uplift Charge Credit Requirements
Securitization Uplift Charge Initial Invoices
- ERCOT has not yet determined the date when it will begin issuing Securitization Uplift Charge Initial Invoices. When the date is known it will be communicated to Market Participants in a Market Notice.
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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