The last two years have seen significant evolution of energy commodity trading agreements. Below is a summary of some key developments of additional provisions promulgated under the EEI Master Power Purchase and Sale Agreement ("EEI") and the ISDA Master Agreement ("ISDA"). Many of these new provisions have arisen as responses to legislative changes (such as the bankruptcy code revisions of 2005), extreme market conditions (such as the new EEI market disruption definitions), judicial and regulatory developments (such as the revised Mobile-Sierra provisions), or market structure evolution (such as the new product definitions to reflect the pending implementation of the nodal market structure in ERCOT).
Highlights of New EEI Contractual Provisions:
- UCC Waiver – February 2007 – Excludes application of UCC §2-609 that would require further financial assurances from a party
- Market Disruption Provisions – June 2008 – Optional language for transactions with index based pricing to allow the parties to select a fallback floating price index
- Bankruptcy Acknowledgements – March 2007 – Applies certain definitions in the 2005 amendments to the Bankruptcy Code
- Mobile-Sierra – 2008 – Limits the application of newly-articulated FERC standards of Mobile-Sierra doctrine
- Coal Annex - April 2007*
- Product definitions in ERCOT - Seller's Choice and Zonal to Nodal Delivery Point Language - April and June 2007
Highlights of New ISDA Contractual Provisions:
- ISDA Global Physical Coal Annex – April 2007*
- U.S. Crude Oil and Refined Petroleum Products Annex and Confirmation – June 2008
- Bi-Lateral Form of Supplement Agreement for Certain Natural Gas Transactions – November 25, 2008
* These two annexes were developed collaboratively and contain virtually identical provisions for trading coal.
NOTE: The EEI Master MRTU Amendment, which amends NP15 and SP15 trades to reflect the new LMP market structure in CAISO was promulgated during the above time period; however, because the applicable LMP market structure change has already occurred, such amendment will not be needed for future transactions.