NPRR #459 · Revision Request
NPRR459 Better Matching Forward Collateralization with Forward Risk in the Real-Time Market
ReasonWith the Public Utility Commission of Texas (PUCT) considering increases to the System-Wide Offer Cap (SWCAP) to support Resource adequacy, collateral requirements will need to be reconsidered in parallel. While energy prices and gas prices are typically highly correlated, during shortage pricing conditions the correlation breaks down as energy prices are no longer based on underlying fuel costs. However, they may be more likely to occur on a seasonal basis, so the proposals in this NPRR should help to mitigate the increased risk in the market. Together, these changes should help to fix the under-collateralization going into a potential shortage pricing event and the over-collateralization following the event.
Created2012-05-17
Approved2012-07-17
Sections Affected
16.11.4.316.11.4.4
Summary
In order to help manage the seasonal nature of the ERCOT market, this Nodal Protocol Revision Request (NPRR) adds a seasonal adjustment factor to raise and lower collateral requirements throughout the year. In addition, this NPRR also recommends that ERCOT only review the last 40 days of history instead of the last 60 days when determining credit requirements.
Action Log 5 milestones
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May 17
PRSDeferred/Tabled→ PRS consideration
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Jun 21
PRSRecommended for Approval→ TAC consideratin
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Jun 28
TACRecommended for Approval→ TAC consideration
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Jul 9
TAC
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Jul 17
BOARDApproved
Amendments
| Date | Body | Motion | Result |
|---|---|---|---|
| Jun 21 '12 | PRS | To recommend approval of NPRR459 and the proposed Other Binding Document, Procedure for Setting Forward Risk Multiplier, as amended by the 6/18/12 NRG comments and as revised by PRS and to forward to TAC. | Passed |
| Jun 28 '12 | TAC | To recommend approval of the proposed Other Binding Document, Procedure for Setting Forward Risk Multiplier, as recommended by PRS in the 6/21/12 PRS Report and as revised by TAC. | Passed |
| Jul 9 '12 | TAC | To recommend approval of NPRR459 as amended by the 7/9/12 ERCOT comments with a recommended priority of 2012 and rank of 135; and an interim manual implementation of NPRR459 with an effective date of August 1, 2012. | Failed |
Ballots
| Date | Body | Result | Yes | No | Abstain | |
|---|---|---|---|---|---|---|
| May 21 '12 | WMS | Motion Carries | 6.83333 | 0.666667 | 3 | xls |
| May 9 '12 | WMS | Motion Fails | 2.58333 | 3.16667 | 10 | xls |
Documents 30
Meetings That Took It Up 8
| Date | Meeting | Committee | Status |
|---|---|---|---|
| Jul 17 '12 | Board of Directors Meeting | BOARD | Concluded |
| Jul 9 '12 | Special TAC Meeting | TAC | Concluded |
| Jun 28 '12 | Technical Advisory Committee (TAC) Meeting | TAC | Concluded |
| Jun 27 '12 | Joint Credit Working Group (CWG)/Market Credit Working Group (MCWG) Meeting | MCWG | Concluded |
| Jun 21 '12 | Protocol Revision Subcommittee (PRS) Meeting | PRS | Concluded |
| May 21 '12 | Special WMS to Consider NPRR459 | WMS | Concluded |
| May 17 '12 | Protocol Revision Subcommittee (PRS) Meeting | PRS | Concluded |
| May 9 '12 | Wholesale Market Subcommittee (WMS) Meeting | WMS | Concluded |