Source: http://www.firstenergycbp.com/FAQ/Credit.aspx
Timestamp: 2018-06-20 11:00:14
Document Index: 481142059

Matched Legal Cases: ['art 1', 'art 1', 'art 2', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 2', 'art 2']

FirstEnergy Ohio Utilities CBP SSO Auctions > FAQ > Credit
Answer: The Word documents for the Pre-Bid Letter of Credit and the post-auction Supplier Letter of Credit (Attachment F, Appendix D to the Master SSO Supply Agreement) have been posted to the Supplier Documents page of the Information Website.
Answer: "Appendix B - Alternate Guaranty Forms" is on page 33 of the Part 1 Application posted on www.firstenergycbp.com/Documents/SupplierDocuments.aspx.
Answer: Yes. Pursuant to the Part 1 Application language, even if a Guarantor that is incorporated in a foreign jurisdiction is rated by one or more rating agencies, a legal opinion still is needed with respect to the Guaranty.
Question: May we place an evergreen clause in the Pre-Bid Letter of Credit (LC) so we can issue the LC for future procurements and adjust the amounts between auctions?
Answer: The evergreen clause is not applicable for the Pre-Bid Letter of Credit due to the limited timeframe that the LOC is in place. Please refer to CRE 00013.
Question: If three products are in the auction: In the Part 2 Application, a bidder needs to specify, at the Maximum Starting Prices, its indicative offer for each of the three products and a total number of tranches summed across products. Which tranche number should a bidder use to calculate the amount of the Pre-Bid Security and additional Pre-Bid Security?
Answer: If three products are in the auction, the tranche number that a bidder should use to calculate the amount of the Pre-Bid Security and additional Pre-Bid Security is the total number of tranches in the bidder’s indicative offer summed across all three products at the Maximum Starting Prices.
Question: If I am a winning bidder, will I be required to post any collateral against my supply obligation?
Answer: The winning bidders will be subjected to the credit requirements as set forth in Article 6 - Creditworthiness; Performance Assurance in the Master SSO Supply Agreement. Depending on the creditworthiness of the bidder, the winning bidder may be required to post collateral in the form acceptable to the Companies.
Question: Assuming the Part 1 Applicant is not rated by a rating agency and did identify a Guarantor, please confirm that the following options are available to this Qualified Bidder: 1) Guarantor may provide the required bid security on behalf of the Part 1 Applicant in the form of cash or a letter of credit. 2) Guarantor will provide the required Master SSO Supply Agreement security in the form of cash or a letter of credit at or before the time of execution of the Master SSO Supply Agreement.
Answer: Considerations related to pre-bid security are outlined in Section 4.2.2 of the Bidding Rules for the FirstEnergy Ohio Utilities' CBP Auctions: Pre-bid security will remain in full force, at a minimum, until five (5) calendar days after the conclusion of the auction. Subsequently, a bidder’s pre-bid security will be cancelled and returned as follows: (a) as soon as practicable if the bidder has won no tranches or (b) after the bidder has signed the Master SSO Supply Agreement and has complied with all creditworthiness requirements of the Master SSO Supply Agreement for the tranches that it has won. The FirstEnergy Ohio Utilities can collect on the financial guarantees of bidders that win tranches but that fail to sign the Master SSO Supply Agreement or fail to comply with the creditworthiness requirements immediately following the close of the auction.
Question: In the definition of Total Exposure Amount in the Master SSO Supply Agreement, is the intent that each of clauses (ii) and (iii) be without duplication to each other (e.g., that a “credit exposure” not include any “mark-to-market exposure amount”)?
Answer: Yes, clauses (ii) and (iii) in the definition of Total Exposure Amount do not duplicate each other. Clause (ii) includes only the mark-to-market exposure amount under any Other SSO Supply Agreement. Clause (iii) includes the payable from the Companies to the SSO Supplier under any Other SSO Supply Agreement.
CRE 00013
Question: Can we keep our Pre-bid Letter of Credit in force (at some nominal amount) between auctions so the language does not need to be reviewed and approved for each CBP Auction?
Answer: FEOU can accept a Pre-bid Letter of Credit that would remain in force (at some nominal amount) between auctions as long as the expiration date is updated for the next CBP auction.
Question: In the Part 1 Application, Section 1.7, Financial and Credit Information for the Applicant, if the Applicant is relying on a Guarantor, is it okay to simply skip (a)-(f)?
Answer: Applicants relying on a Guarantor do not need to complete Section 1.7 (a) to (f) of the Part 1 Application. Applicants relying on a Guarantor will need to complete everything in Section 1.8 of the Part 1 Application.
Question: For the auctions scheduled for April 2016, the Part 2 Application states that the Pre-Bid Security Letter of Credit or cash deposit must cover the higher Indicative Offer between the two auctions. If we are submitting a higher Indicative Offer for the first April auction than in the second April auction, can we reduce our Pre-Bid Security amount after the second April auction?
Answer: No. If an applicant is participating in both of the April auctions, the full pre-bid security amount that is submitted during the Part 2 Application will be held until the conclusion of the second April auction. If an applicant is participating in just the first April auction, their pre-bid security will be returned following the first April auction. Please refer to the Bidding Rules for the process and timing of the return of pre-bid security after the conclusion of an auction.