NOTICE DATE: September 10, 2024

NOTICE TYPE: M-A062024-02 NPRR

SHORT DESCRIPTION: Implementation Details of NPRR1205, Revisions to Credit Qualification Requirements of Banks and Insurance Companies (remaining language)

INTENDED AUDIENCE: All Market Participants

DAYS AFFECTED: November 1, 2024 

LONG DESCRIPTION: On November 1, 2024, remaining Protocol language associated with Nodal Protocol Revision Request (NPRR) 1205, Revisions to Credit Qualification Requirements of Banks and Insurance Companies, will be implemented. 

Specifically, the requirements to have a minimum acceptable bank credit rating of A-/A3, using the lowest rating in case of a split rating and the requirement for US branches of foreign banks to have their stand alone ratings, as outlined within paragraph (1)(a)(iii) of Section 16.11.3, Alternative Means of Satisfying ERCOT Creditworthiness Requirements, will be implemented. 

As a result, letters of credit issued from the following banks will no longer be acceptable to ERCOT starting November 1, 2024: 

Barclays Bank PLC

Credit Industriel et Commercial

DNB Bank ASA

Mizuho Bank Ltd

BMO Harris Bank NA

BOKF NA

In addition, the requirement regarding insurance companies issuing surety bonds to have (a) a minimum acceptable insurance company credit rating of A-/A3 and using the lowest rating in case of a split rating, (b) a $100 million credit limit applied to the entire corporate family , and (c) to have an AM Best financial size category XII, as outlined within paragraphs (1)(b)(ii), (iii) and (iv) of Section 16.11.3 will be implemented. 

Currently, no action is needed for Counter-Parties as it relates to existing surety bonds.

ACTION REQUIRED: If a Market Participant has a letter of credit issued from the above mentioned banks, they should replace them with a new letter of credit issued from an acceptable bank as outlined in NPRR1205 or post alternate form of collateral acceptable to ERCOT. 

ADDITIONAL INFORMATION:  Pursuant to Nodal Protocol 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.

NPRR1205 and the associated documents can be found on the ERCOT website.

Please review the ERCOT Website for previous Market Notices related to this subject.

CONTACT: If you have any questions, please contact your ERCOT Account Manager or reach out ERCOT Credit at [log in to unmask]. 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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