September 19, 2008

 

 

Requested Client Action Information Only

Categories

ISO News and Information

Settlements and Market Clearing

 

 

Enforcement Action Against Lehman

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Summary

CAISO has received inquiries about the potential for increased credit risk due to recent developments in the financial markets.  In response, CAISO is providing notice that it has suspended the right of one Market Participant to trade in the CAISO markets.

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Main Text

The California ISO (CAISO) has received inquiries about the potential for increased credit risk due to recent developments in the financial markets.  CAISO Creditors – i.e., the net creditors in a trade month – are subject to credit risk exposure in the event of a payment default by a net debtor for that trade month.  CAISO is providing notice that, acting pursuant to Section 12.5 of the CAISO Tariff, CAISO has suspended the right of Lehman Brothers Commodity Services, Inc. to participate in the CAISO market effective as of the start of Trading Day September 19, 2008.  This action notwithstanding, CAISO does not consider Lehman Brothers or any other market participant to be a material source of unmitigated default exposure to the CAISO market.

 

CAISO will continue to monitor developments in the financial markets, review market participant credit limits and obligations, and otherwise apply the Credit Provisions of Section 12 of the Tariff.

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For More Information Contact

Kevin King at (916) 608-1247 or KKing@caiso.com