Message-ID: <29498507.1075861588659.JavaMail.evans@thyme> Date: Fri, 2 Nov 2001 09:45:01 -0800 (PST) From: amr.ibrahim@enron.com To: gloria.ogenyi@enron.com, harry.kingerski@enron.com Subject: Illinois - Credit Worthiness requirements Cc: bryan.gottfredson@enron.com, alberto.levy@enron.com, guillermo.canovas@enron.com, d..steffes@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: bryan.gottfredson@enron.com, alberto.levy@enron.com, guillermo.canovas@enron.com, d..steffes@enron.com X-From: Ibrahim, Amr X-To: Ogenyi, Gloria , Kingerski, Harry X-cc: Gottfredson, Bryan , Levy, Alberto , Canovas, Guillermo , Steffes, James D. X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\Creditworthiness X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst Gloria, Harry: Slightly more complex than usual, but here are the credit/financial guarant= ees requirements in Illinois for single billing service, and for providing = nonresidential customers with 1 MW or more. I also included the requiremen= ts for billing, collection, and remittances for IFC charges. Please advise= if you want the conditions for greater than 15 MWh customers, all retail c= ustomers excluding residential. =20 It is noteworthy that there is an obligation that within 15 days of downgra= de of the agent, creditors, affiliates, or guarantors to a rating below A-1= or A-, if issued from S&P or, P-1 or A3, if issued from Moody's, D-2 or A-= , if issued from Duff & Phelps, or F-1 or A-, if issued from Fitch IBCA . W= ithin 30 days after a downgrade the agent shall submit a report that identi= fies the subsection under which it is seeking to demonstrate that its finan= cial resources remain sufficient for providing the services for which it ha= s received a certificate of service authority and includes the information = and documents that subsection requires. See Illinois Administrative Code, = Art. 451.740. =20 Please let me know if you have any question. Brgrds=20 AI Billing, collection and Remittance Procedures for IFC Charges=09Single Bill= ing Service=09Nonresidential Customers with 1MW, or More=09 Billing Option Agreement RES shall remit IFC payment within 7 days of rec= eipt of each IFC payment from customer. 6.8.1 If elected by RES, it shall= remit to DSP the amount of IFC charges within 15 days after receipt of cal= culated charges from DSP, regardless of whether RES has collected from cust= omer. 6.8.2 If RES electing this option-which shall remain effective for= a year-- does not have an unsecured debt rating of BBB- or better, it shal= l deposit a security deposit equal to one month's estimated IFC charges. T= his deposit is determined based on monthly kWh usage of customers. 6.8.3= =0983 Illinois Admin. Code Art. 451.510 The applicant for single billing s= ervices may demonstrate this credit-worthiness in one of four ways: a) The= applicant may undertake a bond issued by a qualifying financial institutio= n. The bond shall be equal to 15% of a good faith estimate of the total amo= unt that the applicant's obligation to the utility under single billing dur= ing the next twelve months. b) The applicant may deliver an irrevocable le= tter of credit from an institution with a long-term obligation rating of A-= or higher from S&P or A3 or higher from Moody's, A- or higher from Duff & = Phelps, or A- or higher from Fitch IBCA. c) The applicant maintains at lea= st 2 of the following commercial paper ratings: A-2 or higher from S&P, P-2= or higher from Moody's, D-2 from Duff & Phelps, or F-2 from Fitch IBCA or = at least two of the following long-term credit ratings: BBB- or higher from= S&P, Baa3 or higher from Moody's, BBB- or higher from Duff & Phelps, or BB= B- from Fitch IBCA. d) All obligations of the applicant to Illinois utili= ties are unconditionally guar-anteed by an affiliate of the applicant that = maintains at least 2 of the fol-lowing commercial paper ratings: A-2 or hig= her from S&P, P-2 or higher from Moody's, D-2 from Duff & Phelps or F-2 fr= om Fitch IBCA; or at least two of the following long-term credit ratings: B= BB- or higher from Standard & Poor's, Baa3 or higher from Moody's or, BBB- = or higher from Duff & Phelps, or BBB- or higher from Fitch IBCA. =0983 Ill= inois Admin. Code Art. 451.110 An applicant shall be deemed to possess suf= ficient financial capabilities to serve non-residential retail customers wi= th maximum electrical demand of 1MWone megawatt or more if the applicant me= ets any of the following criteria: 1) The applicant maintains at least one= of the following commercial paper ratings: A- from S&P, P- from Moody's= , , D- from Duff & Phelps , or F from Fitch IBCA or its successor; or at= least one of the following long-term credit ratings: BBB- from S&P, Baa3= from Moody's, , BBB- from Duff & Phelps , or BBB- from Fitch IBCA or i= ts successor. The applicant shall provide with its application a copy of th= e ratings agency reports that present the ratings of the applicant. 2) The= applicant maintains a borrowing agreement with an affiliate with: A-2 fro= m S&P, P-2 from Moody's, , D-2 from Duff & Phelps , or F-2 from Fitch IB= CA; or at least one of the following long-term credit ratings: BBB- from S= &P, Baa3 from Moody's, , BBB- from Duff & Phelps , or BBB- from Fitch = IBCA. The amount of credit available to the applicant is no less than the g= reater of $500,000 or 5% of the amount of the applicant's revenue for its m= ost recently completed fiscal year. 3) The obligations of the applicant a= rising from the acquisition of elec-tric energy are covered under an uncond= itional guarantee is no less than the greater of $500,000 or 5% of the amou= nt of the applicant's revenue from the sale of electric energy for the most= recently com-pleted fiscal year. 4) The applicant certifies that it will= offer to reimburse its Illinois retail customers for the additional costs = those customers incur to acquire electric energy as a result of the applica= nt's failure to comply with a contractual obligation to supply such energy.= The applicant's pro-spective obligation to reimburse Illinois retail custo= mers shall be covered by an unconditional guarantee, payment bond, or lette= r of credit. 5) The applicant maintains a line of credit or revolving cre= dit agree-ment from a financial institution with a long-term obligation rat= ing of A- from S&P, A3 from Moody's, , A- from Duff & Phelps , or A- = from Fitch IBCA or its successor. 6) The applicant earns 12 points on the= financial ratios set forth in the code=09 Please advise. Brgrds=20 AI