Per our conversation with Dan F., ENA needs to understand issues related to the distinction between "investor owned utilities" (or "IOUs") and municipal utilities (or "municipals") in connection with derivatives activity. In the U.S., this distinction enables us to treat IOUs as general corporates. Thus, we negotiate our standard ISDA Master with an IOU, except that we add an Additional Termination Event to prevent the IOU from taking an adverse stance in its state public utility commission proceedings. A copy of that Additional Termination Event is attached for your review. Our approach with respect to municipals is dramatically different. When negotiating an ISDA Master with municipals, we use a Schedule modeled after the 1992 U.S. Municipal Counterparty Schedule, having additional reps, the added concept of "Incipient Illegality" and an enforceability opinion. A copy of that Schedule is also attached for your reference. We would like to understand whether this distinction also exists in Canada, and if so, in all Canadian provinces, and whether there is a distinction when a municipal is an investor in an IOU (as we understand that the government may assist a utility to emerge from bankruptcy). In that regard, would you recommend that ENA use distinct ISDA Schedules for these types of entities and/or would you recommend specific changes to our format?
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I'd suggest the following: