(8) Metering data. If the servicer is providing the metering,
metering data will be provided to the REP at the same time as the billing.
The REP will be responsible for providing the servicer accurate metering data
(including meter identification information) for all REP's customers whose
meters are not read by the servicer at the time the data is provider to the
independent organization (as defined in PURA §39.151(b)) under the independent
organization's protocols for settlement.
(9) Charge-off allowances. The REP will be allowed to hold
back an allowance for charge-offs in its payments to the servicer. Such charge-off
rate will be recalculated each year in connection with the annual true-up
procedure. In the initial year, REPs will be allowed to remit payments based
on the same system-wide charge-off percentage then being used by the servicer
to remit payments to the indenture trustee for the holders of transition bonds;
thereafter the charge-off percentage will be calculated based upon each REP's
prior year charge-off experience. On an annual basis in connection with the
true-up process, the REP and the servicer will be responsible for reconciling
the amounts held back with amounts actually written off as uncollectible in
accordance with the terms agreed to by the REP and the servicer, provided
that:
(A) The REP's right to reconciliation for charge-offs will
be limited to customers whose service has been permanently terminated and
whose entire accounts (i.e. , all amounts
due the REP for its own account as well as the portion representing transition
charges) have been written off.
(B) If the REP's actual charge-offs are greater than the allowance
for charge-offs, the REP may collect the difference, with interest, from the
date the review was completed, in 12 equal monthly installments beginning
in the month that the transition charges are adjusted to reflect the new charge
off percentages. The REP's recourse will be limited to a credit against future
transition charge payments unless the REP and the servicer agree to alternative
arrangements, but in no event will the REP have recourse to the indenture
trustee, the "SPE" or the SPE's funds for such payments and the indenture
trustee and SPE shall not be liable for such amounts. If the REP's actual
charge-offs are less than the allowance for charge-offs, the REP shall pay
the difference, with interest, from the date the review was completed, in
12 equal monthly installments beginning in the month that the transition charges
are adjusted to reflect the new charge-off percentages. The interest rate
on amounts due to or from the REP under this paragraph shall be the interest
rate in effect pursuant to Texas Utilities Code §183.003 on the date
the annual reconciliation is made. REP and servicer shall each have the unilateral
right to prepay any amounts due hereunder and thus avoid continued accrual
of interest.
(C) The REP shall provide ' the servicer a list of all charge-offs
qualifying for reconciliation under subparagraph (A) of this paragraph, and
documentation permitting servicer to verify that service to the customer has
been terminated and all amounts due the REP from such customers have been
written off. The information shall be provided not later than 30 days prior
to the date on which the annual true-up adjustment is to be filed and shall
cover the most recent 12-month period for which data is available at the time
of submission. The information to be provided by the REP shall include data
demonstrating that the REP has not collected any amounts the REP claimed as
charge-offs in prior periods, or, if any amount previously charged-off has
been collected, quantifying the revenues. The REP's rights to credits will
not take effect until adjusted transition charges reflecting the REPs charge-off
experience have been implemented.
(10) Service termination. In the event that the servicer is
billing customers for transition charges, the servicer shall have the right
to terminate transmission and distribution service to the end-use customer
(or if the servicer is not the transmission and distribution utility to direct
the transmission and distribution utility to terminate service to the end-use
customer) for non-payment by the end-use customer pursuant to
applicable commission rules. In the event that a REP or the POLR is billing
customers for transition charges, the REP shall have the right to transfer
the customer to the POLR (or to another certified REP) or to direct the transmission
and distribution utility to terminate transmission and distribution service
to the end-use customer for non-payment by the end-use customer pursuant to
applicable commission rules. In the event that the POLR is billing customers
for transition charges, the POLR shall have the right to direct the transmission
and distribution utility to terminate transmission and distribution service
to the end-use customer for non-payment by the end-use customer pursuant to
applicable commission rules.
(11) Precedence and modifications of REP standards in a financing
order.
(A) Compliance with financing order standards. If the REP standards
in the applicable financing order are in direct conflict with the standards
in this section, then the REP must comply with the REP standards stated in
the financing order, instead of the standards stated in this section, unless
the standards of the financing order have been modified and approved according
to subparagraph (B) of this paragraph.
(B) Commission modification of standards. The commission may
impose standards on REPs that are different from those in the applicable financing
order but only if the commission receives prior written confirmation from
each rating agency that rated the transition bonds authorized by that financing
order that the proposed modifications will not cause a suspension, withdrawal,
or downgrade of ratings on the transition bonds.
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