Title: Exemption of ERS-Only QSEs from Collateral and Capitalization Requirements
Next Group:
Next Step:
Status: Approved on 09/17/2013
Effective Dates:


Date Gov Body Action Taken Next Steps
09/17/2013 BOARD Approved
07/02/2013 TAC Recommended for Approval ERCOT Board Consideration
06/20/2013 PRS Recommended for Approval TAC Consideration
05/16/2013 PRS Recommended for Approval PRS IA Review
02/21/2013 PRS Deferred/Tabled PRS Language Consideration

Voting Record

Date Gov Body Motion Result
09/17/2013 BOARD Approved NPRR519 as recommended by TAC in the 7/2/13 TAC Report. Passed
07/02/2013 TAC To recommend approval of NPRR519 as recommended by PRS in the 6/20/13 PRS Report Passed
06/20/2013 PRS To endorse and and forward the 5/16/13 PRS Report and revised Impact Analysis for NPRR519 to TAC with a recommended priority of 2014 and rank of 970 Passed
05/16/2013 PRS To recommend approval of NPRR519 as amended by the 4/15/13 ERCOT comments Passed
02/21/2013 PRS To table NPRR519 and to refer the issue to WMS and the Credit Work Group (Credit WG) Passed

Vote tallies here reflect individual votes, not the weight of the votes by market segment. Affirmative votes are not recorded in these vote tallies. For additional details on the voting record, please consult the Recommendation or Action Report, or the official vote tally if available, as posted in the key documents.


Status: Approved
Date Posted: Feb 6, 2013
Sponsor: ERCOT
Urgent: No
Sections: 16.2.1, 16.17
Description: This Nodal Protocol Revision Request (NPRR) exempts those Qualified Scheduling Entities (QSEs) that represent only Emergency Response Service (ERS) Resources and that do not participate in the Day-Ahead Market (DAM), Real-Time Market (RTM) and Congestion Revenue Right (CRR) markets ("ERS-only QSEs") from the collateral and financial statement reporting requirements in Section 16.11, Financial Security for Counter-Parties, and from each of the various requirements in Section 16.16, Additional Counter-Party Qualification Requirements, including those relating to capitalization, certification, and the verification of a risk management framework. Upon notifying ERCOT of its election to move to ERS-only status, ERCOT would verify that the QSE meets the relevant requirements, including having a Total Potential Exposure (TPE) of zero, before authorizing this designation. If a QSE wishes to terminate its ERS-only status in order to participate in other ERCOT markets, it must provide advance written notification to ERCOT and must demonstrate compliance with the relevant collateral and capitalization requirements before receiving approval to terminate.
Reason: The collateral, capitalization, and various other related requirements in Sections 16.11 and 16.16 should not apply to ERS-only QSEs because their participation in ERS does not expose ERCOT to any significant risk of default. Unlike participation in the RTM, DAM or CRR market, participation by a QSE in ERS typically results only in a one-way transaction—a payment from ERCOT to the QSE based on (1) the offer accepted by ERCOT prior to the ERS Standard Contract Term and (2) the QSE’s performance and availability during the ERS Standard Contract Term. Because ERS QSEs do not typically owe sums to ERCOT, those measures designed to reduce financial risk exposure of ordinary Counter-Parties are unnecessary in the context of ERS. ERS QSEs would be obligated to pay ERCOT only in the limited circumstance of an overpayment identified in a resettlement of ERS. In that case, ERCOT would require limited collateralization of any exposure until the overpayment is repaid but would not require compliance with capitalization and reporting requirements.

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