| (-c-) exercised direct or indirect control of a market
participant within the prior six months of a market participant having
exited an electricity or gas market with outstanding payment obligations
that remain outstanding; or
(-d-) have been barred, in any way, participation by
commission order.
(II) If a relationship exists as described in subclause
(I) of this clause, the applicant must include in the affidavit for
each such relationship:
(-a-) the name of the person;
(-b-) the name of the REP that experienced a mass transition
of its customers under §25.43 of this title or market participant
whose ERCOT SFA or similar agreement for an applicable independent
organization was terminated or exited a market with outstanding payment
obligations;
(-c-) details about the person's relationship with
the REP or market participant;
(-d-) factual statements about the events that necessitated
this response, including, if applicable, whether and, if so, how the
REP that experienced a mass transition of its customers under §25.43
of this title settled all outstanding payment obligations;
(-e-) the person's current relationship or position
with the applicant; and
(-f-) the extent of the person's apparent or actual
authority to act in such a way that may be perceived as having direct
or indirect control over the applicant.
(v) A statement affirming that the persons listed under
paragraph (g)(1) of this section do not control the applicant and
are not relied upon to meet the requirements of subsection (e)(1)(A)
and (B) of this section.
(F) To document compliance with subsection (e)(1)(C)
of this section, an applicant must provide:
(i) all relevant information related to each service
agreement executed with a QSE, including:
(I) the term of the service agreement and date the
service agreement began;
(II) the name of the QSE;
(III) the QSE's contact name and title;
(IV) the QSE's physical address;
(V) the QSE's e-mail address and web address; and
(VI) the QSE's business telephone number and toll-free
number;
(ii) a confirmation that applicant has 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;
(iii) a confirmation that applicant will provide outage
notifications in accordance with §25.53 of this title; and
(iv) a confirmation that applicant has or will soon
complete ERCOT's flight test obligation.
(f) Financial requirements. An Option 1 REP must, on
an ongoing basis, maintain compliance with paragraph (1) of this subsection
and, as applicable, paragraph (2) and (3) of this subsection. This
subsection does not apply to an Option 2 or Option 3 REP.
(1) Access to capital. A REP must maintain the requirements
of subparagraph (A) or (B) of this paragraph on an ongoing basis.
(A) A REP may maintain an executed version of the
commission approved standard form irrevocable guaranty agreement.
(i) The guarantor must be:
(I) One or more affiliates of the REP;
(II) A financial institution with an investment-grade
credit rating; or
(III) A provider of wholesale power supply for the
REP, or one of such power provider's affiliates, with whom the REP
has executed a power purchase agreement.
(ii) The guarantor must have:
(I) An investment-grade credit rating; or
(II) Tangible net worth greater than or equal to $100
million, a minimum current ratio (defined as current assets divided
by current liabilities) of 1.0, and a debt to total capitalization
ratio not greater than 0.60, where all calculations exclude unrealized
gains and losses resulting from valuing to market the power contracts
and financial instruments used as supply hedges to serve load.
(B) A REP may maintain an irrevocable stand-by letter
of credit with a face value as determined in clause (i) of this subparagraph,
based on the number of electronic service identifiers (ESI IDs) the
REP serves in the manner prescribed by clauses (ii) and (iii) of this
subparagraph. Additionally, for the first 24 months a REP is serving
load it must maintain not less than one million dollars in shareholders'
equity in accordance with clauses (iv) and (v) of this subparagraph.
(i) Attached Graphic
(ii) The number of ESI IDs includes all customer classes
to which a REP provides retail electric service.
(iii) As the number of ESI IDs served by the REP increases,
the irrevocable stand-by letter of credit must be adjusted to reflect
the required value as determined in clause (i) of this subparagraph.
As the number of ESI IDs served by the REP decreases, the irrevocable
stand-by letter of credit may be adjusted to reflect the required
value as determined in clause (i) of this subparagraph.
(iv) For the first 24 months a REP is serving load,
a REP must not make any distribution or other payment to any shareholders,
affiliates, or corporate parent's affiliates if, after giving effect
to the distribution or other payment, the REP's shareholders' equity
is less than one million dollars. Distributions or other payments
include dividend distributions, redemptions and repurchases of equity
securities, and loans to shareholders or affiliates.
(v) After a REP has continuously served load for 24
months, a prescribed amount of maintained shareholders' equity is
no longer required.
(2) Customer deposits and prepayments. A REP certified
to collect customer deposits must comply with this paragraph and the
requirements of §25.478 of this title (relating to Credit Requirements
and Deposits). A REP certified to collect customer prepayments must
comply with this paragraph and the requirements of §25.498 of
this title (relating to Prepaid Service).
(A) A REP must maintain customer deposits and prepayments
in an escrow account, segregated cash account, or provide an irrevocable
stand-by letter of credit.
(i) If a REP is certified to collect both customer
deposits and prepayments then the REP must use and maintain either
an escrow account, segregated cash account, or irrevocable stand-by
letter of credit to protect customer deposits and prepayments. If
a REP uses an escrow account or segregated cash account, the same
account must be used for customer deposits and prepayments. More than
one irrevocable stand-by letter of credit can be provided to protect
customer deposits and prepayments.
(ii) For customer deposits, the escrow account, segregated
cash account, or an irrevocable stand-by letter of credit must be
adjusted, as necessary, to maintain a minimum of 100% coverage of
the REP's outstanding customer deposits held at the close of each
calendar month.
(iii) For customer prepayments, a REP must maintain,
at minimum, protection for all customer prepayments that equals or
exceeds $50. The balance of an escrow account, segregated cash account,
or an irrevocable stand-by letter of credit must be adjusted, as necessary,
to maintain a minimum of 100% coverage of customer prepayment funds
equal to or exceeding $50 held at the close of each calendar month.
(B) Any irrevocable stand-by letter of credit provided
under this paragraph must be in addition to the irrevocable stand-by
letter of credit required by paragraph (1)(B) of this subsection.
(3) Bankruptcy disclosure. If a REP files a petition
for bankruptcy, is the subject of an involuntary bankruptcy proceeding,
or in any other manner becomes insolvent, including being in default
with the applicable independent organization or with a TDU:
(A) The REP must notify the commission within three
working days of this event and must file with the commission a summary
of the nature of the event; and
(B) The notification must be filed in the commission
control number established for notices prescribed under this paragraph.
If the REP has filed a petition for bankruptcy, then the REP must
include in its filing the petition that initiated the bankruptcy.
(4) Financial documentation requirements. The following
must be provided by an applicant to demonstrate compliance with the
financial requirements under paragraphs (1), (2), and (3) of this
subsection, as applicable. Additionally, the applicant must provide
the month and last day of the applicant's reporting fiscal year or,
if the applicant has a guarantor, the guarantor's reporting fiscal
year. The applicant must also provide a summary of any history of
insolvency, bankruptcy, dissolution, merger, or acquisition of the
applicant or any predecessors in interest during the 60 calendar months
immediately preceding the filing of the Cont'd... |
