NOTICE DATE: February 13, 2021

NOTICE TYPE: M-B021321-01 Financial/Credit

SHORT DESCRIPTION: Revisions to Forward Adjustment Factors

INTENDED AUDIENCE: All Counter-Parties

DAYS AFFECTED: February 13, 2021 until further notice

LONG DESCRIPTION: Total Potential Exposure (TPE) determines the amount of Financial Security a Counter-Party (CP) must provide for its market activity. On a daily basis, ERCOT monitors and calculates each CP’s TPE. Forward Adjustment Factors (FAFs) are used to adjust TPE based on forward electricity prices.

ERCOT has determined that the current FAFs being used to calculate TPE during this cold weather event do not adequately reflect the financial risk created by CPs. Paragraph (3) of Protocol 16.11.4.1, Determination of Total Potential Exposure for a Counter-Party, provides that ERCOT may modify TPE for CPs to adequately match financial risk. Accordingly, this Market Notice serves to notify CPs that ERCOT will be modifying the weights used in computing FAFs, as shown in the chart below, beginning today and until further notice.

CPs should review the Estimated Aggregate Liability (EAL) Summary Report for the recalculated FAFs.

CONTACT: If you have any questions, please send an email to ERCOTcredit@ercot.com or 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 ClientServices@ercot.com.

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