TAC Report

NPRR Number / 803 / NPRR Title / Remove Grey-boxed Language from NPRR439, Updating a Counter-Party’s Available Credit Limit for Current Day DAM
Date of Decision / December 1, 2016
Action / Recommended Approval
Timeline / Normal
Proposed Effective Date / January 1, 2017
Priority and Rank Assigned / Not applicable
Nodal Protocol Sections Requiring Revision / 16.11.4.6.2, Credit Requirements for DAM Participation
Related Documents Requiring Revision/ Related Revision Requests / None
Revision Description / This Nodal Protocol Revision Request (NPRR) removes provisions of NPRR439, Updating a Counter-Party’s Available Credit Limit for Current Day DAM, from the ERCOT Protocols. All provisions of NPRR439 remaining in Protocols are currently grey-boxed.
Reason for Revision / Addresses current operational issues.
Meets Strategic goals (tied to the ERCOT Strategic Plan or directed by the ERCOT Board).
Market efficiencies or enhancements
Administrative
Regulatory requirements
Other: (explain)
(please select all that apply)
Avoids future operational issues related to the implementation of NPRR439.
Business Case / NPRR439 was approved by the ERCOT Board on May 15, 2012, but has not been implemented. An ERCOT review of the operational impacts of NPRR439 in conjunction with the Credit Monitoring and Management (CMM)system technical refresh project has indicated that implementation of NPRR439 may present operational obstacles to the timely running of the Day-Ahead Market (DAM) and other treasury and credit related processes. The circumstances that initially prompted this NPRR have not recurred since 2011.
Removing the provisions of NPRR439 would result in a decreased project demand for the ERCOT portfolio of $125k - $135k (cost as estimated in the January 25, 2012 Impact Analysis) as well as eliminate a potential process risk intended to mitigate a relatively rare occurrence.
Credit Work Group Review / ERCOT Credit Staff and the Credit Work Group (Credit WG) have reviewed NPRR803 and do not believe that it requires changes to credit monitoring activity or the calculation of liability.
PRS Decision / On 10/13/16, PRS unanimously voted to recommend approval of NPRR803 as submitted. All Market Segments were present for the vote.
On 11/10/16, PRS unanimously voted to endorse and forward to TAC the 10/13/16 PRS Report and Impact Analysis for NPRR803. All Market Segments were present for the vote.
Summary of PRS Discussion / On 10/13/16, ERCOT Staff reviewed the purpose and merits of NPRR803 and noted that it has been reviewed by the Credit Work Group (Credit WG) with no objections raised.
On 11/10/16, participants noted that NPRR803 has no impacts to ERCOT systems.
TAC Decision / On 12/1/16, TAC unanimously voted to recommend approval of NPRR803 as recommended by PRS in the 11/10/16 PRS Report. All Market Segments were present for the vote.
Summary of TAC Discussion / On 12/1/16, there was no discussion.
ERCOT Opinion / ERCOT supports approval of NPRR803.
Sponsor
Name / Carrie Bivens, Leslie Wiley, Mark Ruane
E-mail Address / ; ;
Company / ERCOT
Phone Number / 512-248-3900
Cell Number
Market Segment / Not applicable
Market Rules Staff Contact
Name / Kelly Landry
E-Mail Address /
Phone Number / 512-248-4630
Comments Received
Comment Author / Comment Summary
None
Market Rules Notes

None

Proposed Protocol Language Revision

16.11.4.6.2Credit Requirements for DAM Participation

(1)ERCOT shall impose a credit limit on each Counter-Party participating in the DAM as 90% of the ACLD.

[NPRR683: Replace paragraph (1) above with the following upon system implementation:]
(1)ERCOT shall impose a credit limit of the ACLD on each Counter-Party participating in the DAM.

(2)ERCOT shall impose the credit limit for DAM participation calculated in paragraph (1) above on the Counter-Party’s QSEs and all Subordinate QSEs combined participation in the DAM as described in Section 4.4.10, Credit Requirement for DAM Bids and Offers.

(3)A new credit limit will be sent to each Counter-Party participating in the DAM daily.

[NPRR439: Replace paragraph (3) above with the following upon system implementation:]
(3)A new credit limit will be set daily no later than 2350 for the next day’s DAM for each Counter-Party participating in the DAM. On Business Days, the credit limit will include all Financial Security received and approved by ERCOT no later than 1200 that day.
[NPRR439: Insert paragraph (4) below upon system implementation:]
(4)At ERCOT’s sole discretion, an existing credit limit may be updated no later than 0945 for the current day DAM for:
(a)Any cash Financial Security received by ERCOT no later than 0830 of the current day DAM if it:
(i)Was received in the bank account ERCOT designated for Financial Security as posted on the MIS Secure Area; and
(ii)Identifies the Counter-Party and Data Universal Numbering System (DUNS) Number in the remarks section of the wire transfer.
(b)All Financial Security (other than cash) received and approved by ERCOT the prior Business Day that has not been previously included in the credit limit.
(c)All Financial Security (other than cash) received and approved by ERCOT the prior non-Business Day that has not been previously included in the credit limit when the following conditions are met:
(i)Counter-Party provides ERCOT with Notice on a Business Day of its intent to post Financial Security on a non-Business Day;
(ii)ERCOT acknowledges on a Business Day the Counter-Party’s intent to post Financial Security on a non-Business Day;
(iii)A copy of the Financial Security document has been received by ERCOT by e-mail prior to 1200 on a non-Business Day; and
(iv)An original Financial Security document has been received at ERCOT prior to 1200 on a non-Business Day.
(d)If ERCOT updates an existing credit limit, then ERCOT shall notify one of the Counter-Party’s QSEs of the updated credit limit no later than 0945 for the current day DAM.

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