1. 2017 Seasonal Adjustment Factors
Mark Ruane
Director Settlements, Retail and Credit
TAC
March 23, 2017

2. Seasonal Adjustment Factor
ERCOT is addressing the market regarding use of the Seasonal Adjustment Factor (SAF) again in As defined in Protocol Section (2), the SAF allows adjustment of the Minimum Current Exposure (MCE) component of the credit exposure calculation to reflect expected seasonal variation in prices.
Seasonal Adjustment Factor—Used to provide for the potential for Seasonal price increases based on historical trends. ERCOT shall initially set this factor equal to 100%. This factor will not go below 100%. ERCOT will provide Notice to Market Participants of any change at least 14 days prior to effective date along with the analysis supporting the change.

3. Seasonal Adjustment Factor
SAF impacts the Minimum Current Exposure (MCE) component of Total Potential Exposure (TPE)
Analytical approach to estimating SAF:
For the months of May, June, July, August and September ERCOT computed the average Real Time Hub prices for , substituting the current market price cap for previous price caps.
For the months of June, July, August and September, calculate the ratio of the average Hub price in each month to the previous month.

4. Seasonal Adjustment Factor
CWG/MCWG has reviewed the proposed calculation and at their January 18, 2017 meeting voted to endorse 2017 SAF factors as follows:
Note that NPRR 800, Revisions to Credit Exposure Calculations to Use Electricity Futures Market Prices, will eliminate the SAF. Implementation is expected before Summer 2018.

5. Seasonal Adjustment Factor
Summary back-testing of 2017 SAF factors:

6. Seasonal Adjustment Factor
Questions