February 2006 Market Clearing in the Energy Industry 53 © Copyright 2006, CCRO. All rights reserved. ISO/ RTO/ Pool Credit topic CAISO ERCOT MISO ISO-NE NYISO PJM SPP Generic Trans- mission Owner WSPP Financial Assuranc e Requirem ent For entities that do not maintain an “Approved Credit Rating”, the financial security requireme nt is the estimated liability as determine d by CAISO’s SCALE tool / (.90) Allocation of available credit (Unsecure d or Secured) among all market products/a ctivities Allocation of available credit (Unsecure d or Secured) among all market products/a ctivities Reference web site http://www .iso- ne.com/stl mnts/assur _crdt/sprd _shts/inde x.html Specific allocation of credit line (to include both secured and unsecured credit) to each of the four markets is required. The allocation for Virtual Transactio ns market must include secured credit in the form of cash, letter of credit, or net receivable to MP (amounts owing to MP) Allocation of available credit (Unsecure d or Secured) among all market products/ services Total Potential Exposure shall be the sum of the potential exposure to non- payment for Energy Imbalance Market transaction s and Transmissi on Service transaction s billed pursuant to the Tariff Not less than Four (4) times the charges for an average customer or of the estimated charges for an verage month under the applicable service agreement Bilateral credit terms and conditions Collateral/ Margin Trigger When exposure reaches 51%, 70 % and greater than 90% of credit line When exposure reaches 90% of credit line When exposure reaches 90% and 100.0% of credit line When exposure reaches 80%, 90% and 99.99% of credit line Separate triggers for each market. Refer to Attachmen ts K or W of MST and OATT, respectivel y When Exposure reaches 85% of credit line or when two month historical peak exceeds total credit line Total Potential Exposure equals or exceeds ninety percent (90%) of its Total Credit Limit If minimum credit standards are not meet, payment is required 5 days in advance Bilateral performan ce assurance terms