| Governors
of the Federal Reserve System, the Office of the Controller of the
Currency, or a state banking department, and where accounts are insured
by the Federal Deposit Insurance Corporation.
(F) Irrevocable stand-by letters of credit provided
pursuant to paragraphs (1) or (2) of this subsection must be issued
by a financial institution that is supervised or examined by the Board
of Governors of the Federal Reserve System, the Office of the Controller
of the Currency, or a state banking department, and where accounts
are insured by the Federal Deposit Insurance Corporation. The REP
must use the standard form irrevocable stand-by letter of credit approved
by the commission. The irrevocable stand-by letter of credit must
be irrevocable for a period not less than twelve months, payable to
the commission, and permit a draw to be made in part or in full. The
irrevocable stand-by letter of credit must permit the commission's
executive director or the designee to draw on the irrevocable stand-by
letter of credit if:
(i) ERCOT performs a mass transition of the REP's customers;
or
(ii) the commission issues an order revoking the REP's
certificate.
(G) A REP may satisfy the requirements of paragraph
(1)(A) of this subsection by relying upon a guarantor that meets one
of the capital requirements of paragraph (1)(A) of this subsection,
provided that:
(i) The guarantor is an affiliate of the REP and has
executed and maintains the standard form guaranty agreement approved
by the commission, or
(ii) The guarantor is one or more persons that are
affiliates of the REP and such affiliates have executed and maintain
guaranty agreements, business financial commitments, or credit support
agreements that demonstrate financial support for credit or collateral
requirements associated with power purchase agreements and for security
associated with participation at ERCOT, or
(iii) The guarantor is a financial institution that
maintains an investment-grade credit rating and has executed and maintains
guaranty agreements, business financial commitments, or credit support
agreements that demonstrate financial support for credit or collateral
requirements associated with power purchase agreements and for security
associated with participation at ERCOT, or
(iv) The guarantor is a provider of wholesale power
supply to the REP, or one of such power provider's affiliates, and
such person has executed and maintains guaranty agreements, business
financial commitments, or credit support agreements that demonstrate
financial support for credit or collateral requirements associated
with a power purchase agreement and for security associated with participation
at ERCOT.
(5) Billing and collection of transition charges. If
a REP serves customers in the service area of a TDU that is subject
to a financing order pursuant to PURA §39.310, the REP shall
comply with §25.108 of this title.
(6) Proceeds from an irrevocable stand-by letter of
credit.
(A) Proceeds from an irrevocable stand-by letter of
credit provided under this subsection may be used to satisfy the following
obligations of the REP, in the following order of priority:
(i) first, if available, to assist in the payment of
the deposits to retail electric providers that volunteer to provide
service in a mass transition event under §25.43 of this title
(relating to Provider of Last Resort (POLR)) of low-income customers
as identified by the Low-Income List Administrator pursuant to §25.45
of this title;
(ii) second, if available, to assist in the payment
of deposits to retail electric providers that are designated to provide
service in a mass transition event under §25.43 of this title
of low-income customers as identified by the Low-Income List Administrator
pursuant to §25.45 of this title;
(iii) third, for customer deposits and residential
advance payments of customers;
(iv) fourth, for services provided by the independent
organization related to serving customer load;
(v) fifth, for services provided by a TDU; and
(vi) sixth, for administrative penalties assessed under
Chapter 15 of PURA.
(B) Proceeds from an irrevocable stand-by letter of
credit provided under this subsection shall, to the extent that the
proceeds are not needed to satisfy an obligation set out in subparagraph
(A) of this paragraph, be paid to the REP.
(g) Technical and managerial requirements. A REP must
have the technical and managerial resources and ability to provide
continuous and reliable retail electric service to customers, in accordance
with its customer contracts, PURA, commission rules, ERCOT protocols,
and other applicable laws.
(1) Technical and managerial resource requirements
include:
(A) Capability to comply with all applicable scheduling,
operating, planning, reliability, customer registration, and settlement
policies, protocols, guidelines, procedures, and other rules established
by ERCOT or other applicable independent organization including any
independent organization requirements for 24-hour coordination with
control centers for scheduling changes, reserve implementation, curtailment
orders, interruption plan implementation, and telephone number, fax
number, e-mail address, and postal address where the REP's staff can
be directly reached at all times.
(B) Capability to comply with the registration and
certification requirements of ERCOT or other applicable independent
organization and its system rules, or contracts for services with
entities registered with or certified by ERCOT or other applicable
independent organization.
(C) Compliance with all renewable energy portfolio
standards in accordance with §25.173 of this title (relating
to Goal for Renewable Energy).
(D) Principals or permanent employees in managerial
positions whose combined experience in the competitive electric industry
or competitive gas industry equals or exceeds 15 years. An individual
that was a principal of a REP that experienced a mass transition of
the REP's customers to POLR shall not be considered for purposes of
satisfying this requirement, and shall not own more than 10% of a
REP or directly or indirectly control a REP.
(E) At least one principal or permanent employee who
has five years of experience in energy commodity risk management of
a substantial energy portfolio. Alternatively, the REP may provide
documentation demonstrating that the REP has entered into a contract
for a term not less than two years with a provider of commodity risk
management services that has been providing such services for a substantial
energy portfolio for at least five years. A substantial energy portfolio
means managing electricity or gas market risks with a minimum value
of at least $10,000,000.
(F) Adequate staffing and employee training to meet
all service level commitments.
(G) The capability and effective procedures to be the
primary point of contact for retail electric customers for distribution
system service in accordance with applicable commission rules, including
procedures for relaying outage reports to the TDU on a 24-hour basis.
(H) A customer service plan that describes how the
REP complies with the commission's customer protection and anti-discrimination
rules.
(2) An applicant shall include the following in its
initial application for REP certification:
(A) Prior experience of one or more of the applicant's
principals or permanent employees in the competitive retail electric
industry or competitive gas industry;
(B) Any complaint history, disciplinary record and
compliance record during the ten years immediately preceding the filing
of the application regarding: the applicant; the applicant's affiliates
that provide utility-like services such as telecommunications, electric,
gas, water, or cable service; the applicant's principals; and any
person that merged with any of the preceding persons;
(i) The complaint history, disciplinary record, and
compliance record shall include information from any federal agency
including the U.S. Securities and Exchange Commission and the U.S.
Commodity Futures Trading Commission; any self-regulatory organization
relating to the sales of securities, financial instruments, physical
or financial transactions in commodities, or other financial transactions;
state public utility commissions, state attorney general offices,
or other regulatory agencies in states where the applicant is doing
business or has conducted business in the past including state securities
boards or commissions, the Texas Secretary of State, Texas Comptroller's
Office, and Office of the Texas Attorney General. Relevant information
shall include the type of complaint, status of complaint, resolution
of complaint, and the number of customers in each state where complaints
occurred.
Cont'd... |
