Proposed Changes to ERCOT Credit Forms - Update and Revision Details

Detailed updates and proposed changes to ERCOT credit forms including Letter of Credit, Surety Bond, and Guarantee Agreements discussed by Katherine Gross, Senior Corporate Counsel at ERCOT. The elimination of Guarantee Agreements due to regulatory changes and adjustments to Letter of Credit and Surety Bond forms are highlighted with specific modifications and improvements suggested for each form.

• ERCOT
• Credit Forms
• Update
• Proposed Changes
• Guarantee Agreements

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1. Proposed Changes to ERCOT Credit Forms (and updates from April 21, 2023 discussion) Katherine Gross Senior Corporate Counsel ERCOT Public Credit Finance Sub Group May 17, 2023

2. Types of ERCOT Credit Forms 1) Letter of Credit (Secured; Changes Proposed on slides 3 and 4) 2) Surety Bond (Secured; Changes Proposed on slide 5) 3) Guarantee Agreements* (Unsecured; Elimination discussed below) Guarantee Agreement (Domestic Affiliated Guarantor) Third-Party Guarantee Agreement (Domestic Non-Affiliated Guarantor) Foreign Guarantee Agreement (Foreign Affiliated Guarantor) Third-Party Foreign Guarantee Agreement (Foreign Non-Affiliated Guarantor) * Currently, Guarantee Agreements serve one of two purposes: 1) to obtain unsecured credit of up to a maximum of $50 million (will cease to exist in October 2023 due to NPRR 1112); or 2) to satisfy the financial statement requirement in the Protocols by providing the Guarantor s financials (proposed to be eliminated with NPRR 1165). - Given the above red text, ERCOT is proposing to eliminate the Guarantee Agreements on the later of either the effective date of NPRR 1165 or on October 1, 2023. 2 ERCOT Public

3. Letter of Credit Form Proposed Changes: Tighten collection timeline from next Business Day ? Fix an error in Exhibit 1 that inaccurately reflects where payment should be deposited Clarify Exhibit V to better describe replacement of Letter of Credit Revise Exhibits IV and VI to be templates for Issuers, rather than templates for ERCOT Update Met Center address Incorporate email addresses where fax mentioned 3 ERCOT Public

4. Letter of Credit Form Proposed Changes (update from April CFSG meeting): Tighten collection timeline from next Business Day ? Updates in two spots to reflect lessons learned during Covid: 4 ERCOT Public

5. Surety Bond Form Proposed Changes: Update Met Center address Incorporate email addresses where fax mentioned 5 ERCOT Public