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Subchapter M Default Balance Securitization

In October 2021, the PUCT authorized ERCOT to finance a “default balance,” which is an amount not greater than $800 million that includes the following: certain unpaid amounts owed to ERCOT by competitive market participants; Congestion Revenue Right (CRR) auction funds used by ERCOT to reduce short payments related to Winter Storm Uri; and costs associated with implementing the debt obligation order. The PUCT authorized ERCOT to assess a monthly “default charge” on Qualified Scheduling Entitles (QSEs) and CRR Account Holders to repay the default balance. 

The Subchapter M Default Balance Securitization financing closed, and proceeds were disbursed, in November 2021. ERCOT began collecting default charges to repay the default balance in January 2022.

Texas Electric Market Stabilization Funding M LLC (TEMSFM) is the issuing entity for the Subchapter M bonds (i.e., the “Texas Stabilization M Bonds”). TEMSFM is a limited liability company registered in Delaware and its sole member is ERCOT. TEMSFM has no commercial operations. Please see the “Key Documents” section for further information regarding TEMSFM.

Docket 52321
Application of the Electric Reliability Council of Texas, Inc. for a Debt Obligation Order under PURA Chapter 39, Subchapter M and Request for a Good Cause Exception
Docket 52709
Compliance Filing for Docket No. 52321 (Application of the Electric Reliability Council of Texas, Inc. for a Debt Obligation Order Pursuant to Chapter 39, Subchapter M of the Public Utility Regulatory Act)
NPRR1122
Clarifications for Securitization Default Charges