ERCOT·WATCH Search ercot.com  ⌕
NPRR #459 · Revision Request

NPRR459  Better Matching Forward Collateralization with Forward Risk in the Real-Time Market

Approved Urgent sponsor NRG posted 2012-05-01 ercot.com
  1. PRS Jun 21 '12
  2. TAC Jun 28 '12
  3. BOARD Jul 17 '12
  4. PUCT —
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.
Timeline