DRAFT

Credit Working Group

ERCOT

Meeting Minutes

August 17, 2016 (Face-to-Face Meeting, MET Center Room 210A)

Attendance

Independent Retail Electric Providers / Bill Barnes – Reliant Energy
Loretto Martin – Direct Energy LP
Independent Power Marketers / Mark Holler – Tenaska Power Services
Independent Generators / Michael Barberio – Exelon Generation Company LLC
Municipals / Donald Meek – Austin Energy
Michael Mathews – Bryan Texas Utilities (BTU)
Don Daugherty – City of Garland
Others / Ian Haley
Josephine Wan
Shams Siddiqi
Seth Cochran
Heather Lottering
Matt Robson / Michael Weinberg
Bob Wittmeyer
Ryan Evans
Jennifer Bevill
Michael Erbrick
Jan Fudoa
ERCOT Staff / Mark Ruane
Vanessa Spells
Rizaldy Zapanta
Spoorthy Papudesi
Kelly Landry / Neelima Bezwada
Karen Farley
Sean Chang
Pamela Shaw

The meeting was called to order at 9:30 a.m.

Approval of Meeting Minutes – July 20, 2016

Bill Barnes submitted a motion to approve the July 20, 2016 minutes. Donald Meek seconded the motion. Motion passed.

Review of NPRRs

The following NPRRs were reviewed:

NPRR 769 / Alignment with VCMRR013, Clarifications to Verifiable Cost Appeals Process
NPRR 775 / Enhanced Implementation of Limits for Fast Responding Regulation Service
NPRR 789 / Publish All Load Forecast Results

Mr. Barnes submitted a motion that the above NPRRs have no credit implications. Mr. Meek seconded the motion. Motion passed.

NPRR 791

Vanessa Spells presented to the group the draft of NPRR 791 which provides clarification to IEL and MCE as well as restores certain sections that were inadvertently omitted during versioning of previous NPRRs that impacted the IEL and MCE. Mark Ruane added that the proposed revisions had no impact on exposure calculations.

Mr. Barnes pointed out that there were two subscripts listed referencing to “Operating Date.” ERCOT staff agreed to correct this and delete the “d” subscript. Mr. Barnes submitted a motion to approve NPRR 791 with the understanding to correct the subscript “d” to “od”. Mr. Meek seconded the motion. Motion approved.

Review ERCOT Collateral Documents

Ms. Spells informed the group that ERCOT staff has identified necessary changes in the ERCOT standard-form collateral documents. In addition, there were also formatting and spelling errors that needed to be corrected. Mr. Ruane suggested that a more formal process may need to be instituted to review all ERCOT credit-related documents particularly when new NPRRs are submitted and approved. Mr. Meek also suggested that adding an annual review may help. He asked CWG members to provide ERCOT staff comments on possible changes or revisions to the collateral documents prior to the next meeting so that the group can vote on the changes.

DAM Aggregate Credit Exposure Report Issue

Neelima Bezwada explained to the group that the DAM Aggregate Credit Exposure report under-represented the credit that Three-Part Offers (TPOs) provide to credit exposure in one scenario wherein two combined-cycled resource offers yielded the same credit exposure calculation. She emphasized that the calculation of the exposure in DAM is correct and the issue is only on the exposure displayed in the report. She added that a fix to the report is scheduled to be released during the week of August 29.

Credit Exposure and Loss Given Default

Ms. Spells presented to the group the latest periodic quarterly update on credit exposure and loss given default. For more clarity, Seth Cochran suggested including in the assumptions that non-rated entities are given the same probabilities of default assigned to CCC+ entities.

Market Continuity Credit Processes

Ms. Spells presented to the group a list of suggested points for discussion to provide the group some guidance on establishing potential credit protocol changes that would facilitate a DAM restart. The group discussed the various points and agreed to continue the discussion in the next meeting. Mr. Meek reminded the group that feedback is expected to be reported to the F&A in its October meeting.

Credit Updates

Ms. Spells updated the group on the status of ERCOT implementations and tasks related to approved NPRRs and the CMM Tech Refresh project. Ian Haley asked ERCOT staff to provide an update in the next meeting of the feedback from ICE regarding the missing prices.

The meeting was adjourned at 11:33 a.m.

ERCOT Public