Subchapter M Default Balance Securitization

In October 2021, the PUCT authorized ERCOT to finance a “default balance,” which is an amount not greater than $800 million that includes the following: certain unpaid amounts owed to ERCOT by competitive market participants; Congestion Revenue Right (CRR) auction funds used by ERCOT to reduce short payments related to Winter Storm Uri; and costs associated with implementing the debt obligation order. The PUCT authorized ERCOT to assess a monthly “default charge” on Qualified Scheduling Entitles (QSEs) and CRR Account Holders to repay the default balance. 

The Subchapter M Default Balance Securitization financing closed, and proceeds were disbursed, in November 2021. ERCOT began collecting default charges to repay the default balance in January 2022.

Texas Electric Market Stabilization Funding M LLC (TEMSFM) is the issuing entity for the Subchapter M bonds (i.e., the “Texas Stabilization M Bonds”). TEMSFM is a limited liability company registered in Delaware and its sole member is ERCOT. TEMSFM has no commercial operations. Please see the “Key Documents” section for further information regarding TEMSFM.