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November 18, 2010

ERCOT Board Approves Shadow Price Cap Methodology
ERCOT's board of directors approved shadow price caps and power balance penalties as recommended by the Technical Advisory Committee.  As required by nodal protocols, ERCOT staff developed a methodology for setting maximum shadow prices for network constraints and power balance penalties under nodal.  The shadow price caps -- a market tool for managing transmission congestion on the grid -- were used during the nodal market trials and performed as expected, ERCOT staff said.  ERCOT staff also noted that the shadow price methodology could allow prices to go above the current offer cap of $2,250 per megawatt-hour, as established by the PUCT.  The PUCT-established offer price cap is scheduled to go to $3,000 per MWh approximately two months after the nodal market go-live.

ERCOT Board Approves Revisions to Provide for Flexibility in DAM Collateral Requirements
ERCOT's board of directors has approved the Revised Day-Ahead Market Collateral Parameters Process as recommended by the Technical Advisory Committee.  The revisions were recommended to provide for flexibility in the event of unusually high collateral requirements in the period following the nodal launch and to provide ERCOT authorization to make changes if needed.  The board also approved NPRR 286, which will allow ERCOT to send Available Credit Limits (ACLs) to Counter-Parties participating in the Day-Ahead Market, and to send related collateral requests, as needed, on non-Business Days.

ERCOT Board Approves Budget with Flat System Fee
ERCOT's board of directors has approved the ERCOT 2011 operating budget which maintains the system administration fee at the current rate (41.71¢/MWh).  The $190 million budget is based on a staffing level of 584 full-time equivalents and includes $118.4 million for operating expenses, $41.9 million for project spending, and $29.7 million for debt service obligations.  

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