ERCOT Market Credit Manager Change Proposals
"Explore ERCOT Market Credit Manager change proposals including adjustments to the EAL formula and the impacts on Total Payment Entitlement. Analysis includes scenarios involving RFAF adjustments and global methodologies. Winter storm Yuri impacts and period coverage are also discussed."
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Presentation Transcript
EAL Change Proposals Sanchir Dashnyam ERCOT Market Credit Manager ERCOT Public September 20, 2023
Current EAL Formula EAL q = Max [IEL during the first 40-day period only beginning on the date that the Counter-Party commences activity in ERCOT markets, RFAF * Max {RTLE during the previous lrq days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrq days}] + OUT q + ILEq EAL t = Max [RFAF * Max {RTLE during the previous lrt days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrt days}] + OUT t EAL is driven by (1) changes in FAF and (2) how FAF s applied. 2 ERCOT Public
Scenario # 2 (DC Energy proposal): applying RFAF against all RTLE in the lookback period and taking the Max EAL q = Max [IEL during the first 40-day period only beginning on the date that the Counter-Party commences activity in ERCOT markets, Max{(RFAF * Max {RTLE) during the previous lrq days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrq days}] + OUT q + ILE q EAL t = Max{(RFAF * Max{RTLE) during the previous lrt days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrt days}] + OUT t 3 ERCOT Public
Scenario # 3 (ERCOTs proposal): adjusting RFAF formula to reflect each MP s unique situation EAL q = Max [IEL during the first 40-day period only beginning on the date that the Counter-Party commences activity in ERCOT markets, RFAF * Max {RTLE during the previous lrq days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrq days}] + OUT q + ILE q EAL t = Max [RFAF * Max {RTLE during the previous lrt days}, RTLF] + DFAF * DALE + Max [RTLCNS, Max {URTA during the previous lrt days}] + OUT t Two RFAF s: CP specific RFAF and Global RFAF CP specific RFAF = Projected Real-Time ICE Forward Average Price / Max RTLE date Historic Real-Time Settled Average Price Global RFAF is calculated based on existing methodology. Global RFAF is used in MCE calculations. 4 ERCOT Public
Impact of the two proposals on TPE: Market TPE formulas excluded the following: IEL for new entities for the two proposals (but included in the existing TPE) Winter storm Yuri impacts (short pays) Period covered: 1/1/2022 through 8/31/2023 5 ERCOT Public
Impact of the two proposals on TPE: Load and Generation 6 ERCOT Public
Impact of the two proposals on TPE: Load 7 ERCOT Public
Impact of the two proposals on TPE: Generation 8 ERCOT Public
Impact of the two proposals on TPE: Traders 9 ERCOT Public
