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NPRR400
Summary
| Title | Eliminate Unsecured Credit for CRR Auctions and for Future Credit Exposure and Eliminate Netting of FCE with CCE |
|---|---|
| Next Group | |
| Next Step | |
| Status | Approved on 10/18/2011 |
| Effective Dates |
11/09/2012
|
Action
| Date | Gov Body | Action Taken | Next Steps |
|---|---|---|---|
| 10/18/2011 | BOARD | Approved | |
| 10/06/2011 | TAC | Recommended for Approval | Board consideration |
| 09/22/2011 | PRS | Recommended for Approval | TAC consideration |
| 08/18/2011 | PRS | Deferred/Tabled | PRS consideration |
Voting Record
| Date | Gov Body | Motion | Result |
|---|---|---|---|
| 10/18/2011 | BOARD | To approve NPRR400 as recommended by TAC in the 10/6/11 TAC Report | Passed |
| 10/06/2011 | TAC | To recommend approval of NPRR400 as recommended by PRS in the 9/22/11 PRS Report, as amended by the 10/5/11 ERCOT comments and as revised by TAC. | Passed |
| 09/22/2011 | PRS | To recommend approval of NPRR400 as amended by the 9/19/11 ERCOT comments with a priority of Critical and rank of 9.44 and to forward NPRR400 and the preliminary Impact Analysis to TAC. | Passed |
| 08/18/2011 | PRS | To grant NPRR400 Urgent status andto table NPRR400 for one month. | Passed |
Background
| Status: | Approved |
|---|---|
| Date Posted: | Aug 3, 2011 |
| Sponsor: | ERCOT |
| Urgent: | Yes |
| Sections: | 16.11, 16.11.4.1, 16.11.4.3, 16.11.4.6, 16.11.4.6.1, 16.11.4.6.2, 16.11.5, |
| Description: | This Nodal Protocol Revision Request (NPRR) requires that a) the Future Credit Exposure (FCE) component of the collateral calculation and b) the CRR Auction credit limit be collateralized with cash, letter of credit or a surety bond. Unsecured credit and unsecured credit through guarantees will no longer be available for this. This NPRR also eliminates netting of FCE with Current Credit Exposure (CCE) for all Counter-Parties. To accomplish the above ERCOT considered the approaches listed below: (1) Establish separate collateral "pools" for Qualified Scheduling Entity (QSE) and CRR activities (similar to zonal); and (2) Continue with a combined collateral pool, but providing sublimits for activity that must be secured. ERCOT has used the second approach in the NPRR as it provides the most flexibility and ability to maximize use of collateral. The NPRR addresses three areas: (1) Splits the Total Potential Exposure (TPE) into two portions: (a) Total Potiential Exposure Secured (TPES) is the TPE that must be secured with cash, letter of credit or surety bond; and (b) Total Potential Exposure Any (TPEA) is the TPE that may be secured with any form of collateral. TPEA will include all exposure not included in TPES. (2) Defines subcomponents of Financial Security and establishes additional requirements to maintain adequate secured collateral: (a) Secured Collateral (cash, letter of credit or surety bond) (b) Remainder Collateral (Financial Security minus TPES minus Net Positive Exposure of approved CRR Bilateral Trades) (3) Redefines Available Credit Limit(ACL) and provides for separate calculations of ACL for the Day Ahead (DAM) (ACLD) and CRR (ACLC) markets. ACL for CRRs must be collateralized with Secured Collateral. |
| Reason: | To ensure that a) the Future Credit Exposure (FCE) component of the collateral calculation and b) the CRR Auction credit limit is secured with cash, letters of credit or surety bonds and to satisfy expected Commodities Exchange Act exemption requirements. |
Key Documents
Aug 3, 2011 - doc - 162.5 KB
Sep 26, 2011 - doc - 64 KB
Aug 19, 2011 - doc - 102 KB
Aug 22, 2011 - doc - 149 KB
Sep 15, 2011 - doc - 120 KB
Sep 28, 2011 - doc - 117.5 KB
Sep 28, 2011 - doc - 143.5 KB
Sep 27, 2011 - doc - 64 KB
Oct 6, 2011 - doc - 150 KB
Oct 7, 2011 - doc - 192 KB
Oct 18, 2011 - doc - 193.5 KB