Sun, Feb 14, 2021 02:57 PM

M-C021421-01 Revisions to Total Potential Exposure (TPE)

NOTICE DATE: February 14, 2021

NOTICE TYPE: M-C021421-01 Financial/Credit

SHORT DESCRIPTION: Revisions to Total Potential Exposure (TPE)

INTENDED AUDIENCE: All Counter-Parties

DAYS AFFECTED: February 14, 2020 until further notice

LONG DESCRIPTION: 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. Protocol Section provides that ERCOT may modify TPE for CPs to adequately match financial risk.

ERCOT has determined that, as a result of the significant weather event, the TPE calculation does not adequately match the financial risk of CPs registered with ERCOT. Accordingly, this Market Notice serves to notify CPs that ERCOT is temporarily reducing the TPE for all CPs by 15% until further notice. ERCOT is cognizant of the elevated risk for default in the ERCOT market in the upcoming days, and will not be making any further changes to CP credit exposure calculations during this event.

CPs should review the Available Credit Limit (ACL) Summary Report and TPE Summary Report for recalculated TPE amounts.

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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