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Proposed Revision Request Detail Help
PRR Life Cycle*Initial Comment********
PRR Details
PRR #
1654
Title Changes related to additional collateral requirement
Date Submitted 11/18/2025 11:35 AM
PRR Category B
Priority Emergency
Owner Chandinee Chandrasekaran, Chandinee Chandrasekaran (CAISO)
Status Initial Comment
Status End Date 12/9/2025 11:59 PM
Related BPM Congestion Revenue Rights
BPM Section Section 9.3
Attachment H 1.1 Pre-Auction Credit Requirement Calculation
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Existing Language
​​​​​​​​​​​​​​​​​​​​​Section 9.3​

In addition, any allocated CRRs that are subject to load migration and offered for sale in the annual auction are subject to an additional collateral component before the allocated CRR can be offered for sale, referred to as a financial CRR holding requirement. The concept is that any LSE with load subject to load migration can be required to hold a counter-flow CRR should they lose load to another LSE.  In most cases the counter-flow CRR is offset by the original allocated LSE or LSE_LMT type CRR, but if the original allocated LSE or LSE_LMT type CRR is sold then there is nothing in the LSE's portfolio to offset the counter-flow CRR.  This same additional credit requirement is applied to SRS trades of allocated CRRs subject to load migration also.  This additional credit requirement is not applied to monthly allocated CRRs since load migration is only applied to seasonal (annual and long term) allocated CRRs.

Attachment H 1.1 Pre-Auction Credit Requirement Calculation ​

There is an additional credit component for LSEs that are offering for sale seasonal allocated CRRs (annual and long-term) that are subject to load migration in the annual auction.  The concept is that any LSE with load subject to load migration can be required to hold a counter-flow CRR should they lose load to another LSE.  In most cases the counter-flow CRR is offset by the original allocated LSE or LSE_LMT type CRR, but if the original allocated LSE or LSE_LMT type CRR is sold then there is nothing in the LSE's portfolio to offset the counter-flow CRR.  So, the additional credit requirement is the CRR holding value for the counter-flow CRR. This concept is covered in the discussion in section 2.2 of attachment 'H' below about the “financial group".  So if this rule applies then the selling entity would be required to have sufficient collateral to cover this additional amount prior to submitting the sell offer and then if the sell offer is taken then the CRR credit holding requirement for this same counter-flow would be added to the financial group in the CRR holding requirements calculation.​

Proposed Language
​​​The above section related to the additional collateral requirement is removed
Reason For Revision
Rollback effective as of 11/18/2025

As part of implementing the CRR Replacement Project earlier this year, the ISO changed an element of the credit requirements for participating in the CRR process.  The specific change relates to the credit required of participants submitting offers to sell CRRs in the annual auction that initially were secured from the allocation process.  In the event of load migration, the ISO would issue counterflow CRRs to the party that initially procured the CRRs in the allocation.  The ISO increased the credit required from the party submitting these sell offers to address the risk of that party defaulting during the period the load migration counterflow CRRs are in effect.  The specific details of this requirement were proposed in PRR 1619 and are reflected in Attachment H, section 1.1B of the CRR BPM. 
  
The ISO has received multiple inquiries from CRR participants reporting unexpectedly high credit requirements to participate in the 2026 annual CRR auction.  The ISO determined these high credit requirements are driven by the recent updates to Attachment H of the BPM.  Although the ISO remains concerned about the risk of default from parties receiving load migration counterflow CRRs, the new BPM rules are resulting in credit posting requirements that would materially impact participation in the annual CRR auction in ways that neither the ISO nor market participants anticipated.  The ISO has decided to submit an emergency PRR to remove the new requirements described in Attachment H of the CRR BPM effective immediately.  ​
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