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Overview of CWG Activities and Upcoming Initiatives in Creditworthiness

This document outlines the key activities of the Credit Working Group (CWG) over the last six months, including involvement in the Oliver Wyman project, updates to creditworthiness standards, and discussions on guarantees. It also highlights the planned activities for the upcoming six months, such as upcoming Board of Directors (BOD) credit presentations and the election of new leadership. Additionally, the document details subgroup efforts in researching risk mitigation measures and reviews of potential Nodal credit requirements, emphasizing the importance of these updates for future credit strategies.

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Overview of CWG Activities and Upcoming Initiatives in Creditworthiness

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  1. Credit update • CWG activity over the last six months • CWG activity for upcoming six months • Upcoming BOD credit presentations • CWG discussion re: guarantees

  2. CWG activity over the last six months • Involved with OW project • Provided input to RFP Scope of Work • Provided feedback on respondents • Met for two full day sessions to review assumptions and provide input for modeling • Subgroup researched other risk mitigation measures • Updated Creditworthiness Standards • Updated CWG Charter • Reviewed PRRs and NPRRs for credit implications

  3. CWG activity for upcoming six months • Election of new Chair and Vice Chair • Ongoing involvement in Oliver Wyman project • Review preliminary results in January – date TBD • Review Nodal credit requirements for CRRs in light of PJM event • Subgroup researching other risk mitigation measures - ongoing • Updated Creditworthiness Standards - ongoing

  4. Upcoming BOD credit presentations • Jan 14th or Feb 18th – as part of BOD Nodal review, will discuss credit approach for Nodal • Feb 6th - F&A Committee to review OW results • Feb 19th - Expect to present OW results to full BOD at their meeting

  5. CWG discussion re: guarantees • General consensus that • Some amount of discount should be applied to guarantees • Believe results of OW capital adequacy study would be helpful in determining “how much” • Guarantee form should • Allow an evergreen feature • Not preclude an “unlimited” guarantee • Discussed a requirement that all entities that have a parent entity should provide some level of guarantee above the EAL requirement • For “close out” costs • For potential future exposure

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