| (3) Obligations. An entitlement that is assigned, sold, or transferred under this section remains subject to the provisions of the Agreement under which it originated, and the assignee of that entitlement succeeds to all of the rights and obligations of the assignor with respect to that entitlement. (4) Liability. Neither the assignor nor any previous entitlement holder that has remained liable for payments due to the affiliated PGC in connection with the entitlement as a result of a previous assignment, sale, or transfer is released from liability to the affiliated PGC for payments due in connection with the entitlement unless: (A) At least 14 days before the effective date of the assignment, sale, or transfer, assignee has provided security to the affiliated PGC that is equal to or greater than the security originally given to the affiliated PGC for the entitlement; and (B) At least ten days before the effective date of the assignment, sale, or transfer, the affiliated PGC has notified both assignor and assignee in writing that the security has been approved and accepted by the affiliated PGC. (5) Requests to approve security. The affiliated PGC shall respond to written requests to approve security to be offered by a prospective assignee within 14 days after receipt of that request. Approval shall not be unreasonably withheld. (6) Effective date. No assignment, transfer, or sale of the entitlement by a party is binding on the non-assigning party until the non-assigning party receives written notice of the assignment, sale, or transfer and a copy of the executed assignment, sale, or transfer document, and the assignment, sale, or transfer is not effective unless such notice is received at least three days before the beginning of the entitlement month. (j) True-up process. (1) Process. For 2002 and 2003, the affiliated PGC shall reconcile, and either credit or bill to the transmission and distribution utility, any difference between the price of power obtained through the capacity auctions under this section and the power cost projections that were employed for the same time period in the ECOM model to estimate stranded costs for the affiliated PGC in the PURA §39.201 proceeding. (2) PGCs without stranded costs. An affiliated PGC that does not have stranded costs described by PURA §39.254 is not required to comply with paragraph (1) of this subsection. (3) Any order by the commission that finally resolves an affiliated PGC's stranded costs, prior to true-up, supersedes this subsection. (k) True-up process for electric utilities with divestiture. If an affiliated PGC meets its capacity auction requirements through a divestiture as allowed by subsection (d) of this section, the proceeds of the divestiture shall be used for purposes of the true-up calculation. (l) Modification of auction procedures or products. Upon a finding by the commission that the auction procedures or products require modification to better value the products or to better suit the needs of the competitive market, the commission may, by order, modify the procedures or products detailed in this section. (m) Contract terms. (1) Standard agreement. Parties shall utilize the Agreement in the form prepared by the Edison Electric Institute (Version 2.1). The Cover Sheet to the Agreement shall provide for credit terms that are based upon objective credit standards determined by the commission. There may be different versions of the Agreement applicable to sales of capacity auction products in different regions in Texas. For example, ERCOT and the non-ERCOT areas may have different versions of the Agreement. (2) Applicability. The terms and conditions set forth in any Agreement apply only to the entitlements obtained in the capacity auctions under this section. (3) Electronic scheduling. The Agreement shall require that, if the affiliated PGC provides an electronic scheduling interface for the dispatch of entitlements, then the entitlement holder shall schedule the dispatch of its entitlements using that electronic interface. (4) Scheduling discrepancies. If an entitlement holder submits a non-conforming schedule to the affiliated PGC for an entitlement that violates any of the scheduling requirements for that capacity auction product type for a scheduled hour, then the schedule for that hour is deemed to be the same as the schedule for the hour most closely preceding that scheduled hour that was not a non- conforming schedule. The affiliated PGC shall promptly notify the entitlement holder of a non-conforming schedule. However, the requirements of this paragraph are subject to the default scheduling requirements for baseload and gas- intermediate products delineated in subsections (f)(3)(A)(iv)(V) and (f)(4)(A)(v) of this section for ERCOT areas, and subsections (g)(2)(E)(v) and (g)(3)(E)(v) of this section for non-ERCOT areas. (5) Alternative dispute resolution. Alternative dispute resolution shall be a condition precedent to any right of any legal action regarding a dispute arising under, or in connection with, the standard agreement adopted by the commission. The parties may mutually agree to dispute resolution procedures. If the parties are unable to agree upon such procedures within five days after such dispute arises, the parties shall use the alternative dispute resolution procedures contained in the ERCOT protocols. (6) Seller's failure to fulfill obligation. If an entitlement holder is assessed for imbalanced schedules, failure to procure ancillary services, or any other charges from ERCOT due to the failure of the affiliated PGC to fulfill the auctioned obligation, the affiliated PGC shall be responsible for these costs incurred by the entitlement holder. |
| Source Note: The provisions of this §25.381 adopted to be effective January 4, 2001, 25 TexReg 12961; amended to be effective August 1, 2002, 27 TexReg 5982; amended to be effective July 31, 2003, 28 TexReg 5873 |
