February 2006 Market Clearing in the Energy Industry 74 © Copyright 2006, CCRO. All rights reserved. NCC/ North American Energy Credit and Clearing Corp (“NECC”) New York Mercantile Exchange (“NYMEX”) ICE/LCH Clearnet Virtual Markets Assurance Corporation (“VMAC”) Natural Gas Exchange Financing Fees: Buyers and sellers pay no FCM fees but may incur payment discounts or financing fees based on their selected payment option. Discounted payments and receipts are based on the time value of money (2 month LIBOR + 20 bps) for accelerated payment after the delivery month and for sellers that opt for weekly settlements an additional discount based on the cost of investment grade credit is assessed. Investment grade buyers opting to maintain the standard EEI/NAESB payment date operate under a credit facility and do not receive a discount on their payments. price volatility, are set by LCH to their members (FCM’s). An FCM can charge a different rate to the customer. Scorekeepi ng NCC obtains its forward price information from ICE and where applicable other accepted cash market indices at the relevant delivery points. It employs SPAN® methodology to margin and mark forward positions. NYMEX using defined transparent and consistent methodologies, including SPAN will mark participants positions. Daily Settlement Prices are determined by ICE and LCH from transaction or bid/offer prices on the ICE system together with survey data, where necessary. VMAC employs Platts as the pricing source for all power and gas products. NGX’s utilizes of market prices derived from its exchange [and other sources] as well as calculating initial margin by assessing the actual price movements that have occurred in the recent history of each product, then