FERC Technical Conference To Examine Credit, Counterparty Risk Issues In RTOs Due To COVID-19
June 8, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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FERC has issued an agenda for a July 8-9 technical conference concerning impacts that the emergency conditions caused by COVID-19 are having on various segments of the United States’ energy industry, with specifics concerning FERC's focus on access to capital now available
A July 9 panel will address, "Access to Capital - Credit, Liquidity, and Return
emergency has had a significant impact on the financial markets and the financial health
of individual companies, which has introduced new risks that could potentially impact
access to capital. Some of these risks include, but are not limited to, decreased demand,
lower commodity prices, reduced access to credit and reduced market liquidity, increased
delinquencies, insolvent customers/unrecoverable defaults, lower and/or more volatile
stock prices, construction delays, and lags in rate recovery," the agenda notes
Among other things, the panel will address:
• What risk factors from the COVID-19 emergency are most acute, particularly with
respect to potential credit-rating downgrades and other credit deterioration?
• How has the COVID-19 emergency affected the counterparty risks that pipelines face
from natural gas and oil shippers, and that RTOs/ISOs face from power market
participants and what are those counterparty risks? What new measures, if any, are
needed to address these risks?
• How could energy, capacity, natural gas, and oil markets be affected if market
participants get credit downgrades or face other conditions that could limit their
ability to participate in those markets?
• Is there an increased risk of financial failure of a major market participant due to the
COVID-19 emergency? If so, are adequate credit monitoring and collateral
requirements in place to limit that impact?
Liquidity and Access to Capital
• What, if any, liquidity issues are panelists seeing in energy markets due to the
COVID-19 emergency? What are the principal causes of those liquidity issues?
What are the impacts of those liquidity issues on operations and infrastructure