| (a) Billing and payment. Within a reasonable time after the
first day of each month, transmission service providers (TSPs) shall issue
invoices for the prior month's transmission service to distribution service
providers (DSPs) and customers responsible for the export of power from the
Electric Reliability Council of Texas (ERCOT) region.
(1) An invoice for transmission service shall be paid so that
the TSP will receive the funds by the 35th calendar day after the date of
issuance of the invoice, unless the TSP and the transmission service customer
agree on another mutually acceptable deadline. All payments shall be made
in immediately available funds payable to the TSP, or by wire transfer to
a bank named by the service provider or by other mutually acceptable terms.
(2) Interest on any unpaid amount shall be calculated by using
the interest rate applicable to overbillings and underbillings, set by the
commission, and compounded monthly. Interest on delinquent amounts shall be
calculated from the due date of the bill to the date of payment. When payments
are made by mail, bills shall be considered as having been paid on the date
of receipt by the TSP.
(3) In the event the transmission service customer fails, for
any reason other than a billing dispute as described in subparagraph (A) of
this paragraph, to make payment to the TSP on or before the due date, and
such failure of payment is not corrected within 30 calendar days after the
TSP notifies the customer to cure such failure, the customer shall be deemed
to be in default.
(A) Upon the occurrence of a default, the TSP may initiate
a proceeding with the commission to terminate service. If the commission finds
that a default has occurred, the transmission service customer shall pay to
the TSP an amount equal to two times the amount of the payment that the customer
failed to pay, in addition to any other remedy ordered by the commission.
In the event of a billing dispute between the TSP and the transmission service
customer, the TSP will continue to provide service during the pendency of
the proceeding, as long as the customer:
(i) continues to make all payments not in dispute; and
(ii) pays into an independent escrow account the portion of
the invoice in dispute, pending resolution of such dispute.
(B) If the transmission service customer fails to meet the
requirements in subparagraph (A) of this paragraph, then the TSP will provide
notice to the customer and to the commission of its intention to terminate
service.
(C) Any dispute arising in connection with the termination
or proposed termination of service shall be referred to the alternative dispute
resolution process described in §25.203 of this title (relating to Alternative
Dispute Resolution (ADR)).
(b) Indemnification and liability.
(1) Neither a transmission service customer nor TSP shall be
liable to the other for damages for any act that is beyond such party's control,
including any event that is a result of an act of God, labor disturbance,
act of the public enemy, war, insurrection, riot, fire, storm or flood, explosion,
breakage or accident to machinery or equipment, a curtailment, order, regulation
or restriction imposed by governmental, military, or lawfully established
civilian authorities, or by the making of necessary repairs upon the property
or equipment of either party.
(2) Notwithstanding the provisions of paragraph (1) of this
subsection, a transmission service customer and TSP shall assume all liability
for, and shall indemnify each other for, any losses resulting from negligence
or other fault in the design, construction, or operation of their respective
facilities. Such liability shall include a transmission service customer or
TSP's monetary losses, costs and expenses of defending an action or claim
made by a third person, payments for damages related to the death or injury
of any person, damage to the property of the TSP or transmission service customer,
and payments for damages to the property of a third person, and damages for
the disruption of the business of a third person. This paragraph does not
create a liability on the part of a TSP or transmission service customer to
a retail customer or other third person, but requires indemnification where
such liability exists. The indemnification required under this paragraph does
not include responsibility for the TSP's or transmission service customer's
costs and expenses of prosecuting or defending an action or claim against
the other, or damages for the disruption of the business of the service provider
or customer. The limitations on liability set forth in this subsection do
not apply in cases of gross negligence or intentional wrongdoing.
(c) Creditworthiness for transmission service. For the purpose
of determining the ability of a transmission service customer to meet its
obligations related to transmission and any other obligation in Division 1
of this subchapter (relating to Open-Access Comparable Transmission Service
for Electric Utilities in the Electric Reliability Council of Texas), a TSP
may require reasonable credit review procedures. This review shall be made
in accordance with standard commercial practices.
(1) The TSP may require a transmission service customer to
provide and maintain in effect during the term of service, an unconditional
and irrevocable letter of credit in a reasonable amount as security to meet
its responsibilities and obligations under Division 1 of this subchapter or
an alternative form of security proposed by the customer and acceptable to
the service provider and consistent with commercial practices established
by the Uniform Commercial Code that reasonably protects the TSP against the
risk of non-payment. Credit worthiness standards must be applied to all transmission
service customers on a non-discriminatory basis.
(2) If a transmission service customer is creditworthy, no
letter of credit or alternative form of security shall be required.
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