Market Credit Working Group update to the Wholesale Market Subcommittee 02/04/2015

MCWG update to WMS Joint meeting of MCWG and CWG on Tuesday, January 20 th 6 NPRRs reviewed for credit impacts – All NPRRs were either reporting or clean up so no credit impacts Annual review of DAM collateral factors (“e factors”) – No changes recommended and current values endorsed – WMS vote

MCWG update to WMS Update on NPRR638 – CWG/MCWG expressed the desire to move NPRR638 forward – Some stakeholders suggested modifications to the calculations Gas price adjustment Price averages based on hourly blocks – CWG/MCWG agreed that the management of these modifications should be done through comments to NPRR638 – CWG/MCWG voted to endorse NPRR638 with that understanding

MCWG update to WMS Review of NPRR language for NPRR670, NPRR671, and NPRR673 – CWG/MCWG reviewed the language and had no concerns – Voted to endorse Discussion of changes to Available Credit Limit calculation – ERCOT applies a 90% buffer to ACL – Penalizes entities that ‘overcollateralize’ – Agreement to apply the 90% to gross up TPE instead of decreasing ACL; an NPRR is being drafted Continued discussion of tail event risk management