ERCOT Proposes Reduction in Cure Period

ERCOT has proposed Nodal Protocol Revision Request (NPRR) 612 to reduce the cure period for failure to make payment or transfer funds, provide collateral or designate/maintain an association with a Qualified Scheduling Entity (QSE).

Specifically, such cure period would be reduced to one business day subsequent to written notification of the breach. Currently, the cure period is two days.

In addition, the NPRR clarifies that an invoice payment from available security will be considered a late payment per Protocol Section 16.11.6.

ERCOT said that implementation of the NPRR is expected to have positive credit implications in that it reduces the default time period, and therefore the associated credit risk

Reducing the cure period allows reduction of the collateral posted by Counter-Parties to cover their risk during the cure period, ERCOT said.