Credit Treatment For Adjusted Participants MOD_15_17 Credit Treatment For Adjusted Participants 12st December 2017

Summary Information Proposal seeks to amend the credit treatment for Adjusted Participants so that their credit requirement for the Undefined Exposure Period is based on a forecast volume rather than a forecast adjustment factor This treatment is the same as for New Participants under Part B and for Adjusted Participants under Part A The current Part B treatment is a new approach and is not included in the system design which currently applies the ‘old’ forecast volume approach It was appropriate to make this refinement in the initial system build; however, since this is no longer possible SEMO are of the view that the likely costs associated with implementing this as a Day 2 change mean that it is now more appropriate to revert to the ‘old’ approach This is in the context of the Adjusted Participant mechanism being unused in SEM so that it is expected to be a rare occurrence for ISEM

Summary Information A minor amendment in the drafting is needed to capture the following which we would seek to address in the FRR; Glossary and variable definitions for ‘Credit Assessment Volume’ and VCAS should be updated to capture the fact that these would apply to ‘New and Adjusted Participants’ New clause G.14.1.3, which details the Undefined Potential Exposure for New/Adjusted Participant as based on the product of VCAS and PCA should reference Assetless Units as well as Generator Units Note that amendment to G.14.1.2 and inclusion of a new clause G.14.1.3 seeks to address an apparent inconcistency identified during drafting whereby G.14.1.2 currently states that Undefined Potential Exposure for New Participant is based on the Combined Credit Assessment Price (CCAP) where this should stae the Credit Assessment Price(PCA) for Generator and Assetless Units to be consistent with the algebraic formulation