Illinois Administrative Code › Title 83 - PUBLIC UTILITIES › Part 451 - CERTIFICATION OF ALTERNATIVE RETAIL ELECTRIC SUPPLIERS › Subpart D - PROCEDURES FOR APPLICANTS SEEKING TO SERVE ALL RETAIL CUSTOMERS › Section 451.320 - Financial Qualifications under Subpart D

Current through Register Vol. 48, No. 28, July 12, 2024
a) An applicant shall be deemed to possess
				sufficient financial resources to be certified as an ARES able to serve all retail
				customers if it meets any of the following criteria:
1) The applicant maintains at least one of the
				following commercial paper ratings: A-2 or higher from Standard & Poor's or its
				successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or
				higher from Fitch Ratings or its successor; or at least one of the following
				long-term credit ratings: BBB- or higher from Standard & Poor's or its
				successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB-
				or higher from Fitch Ratings or its successor. The applicant shall provide with its
				application a copy of the ratings agency reports that present the ratings of the
				applicant.
2) The applicant maintains
				one or more lines of credit with RTOs and/or unaffiliated wholesale suppliers for
				electric energy for delivery to the service territories of the utilities for which
				the applicant is seeking a certificate.
A) The
				amount of credit available to the applicant under the credit agreements shall in
				aggregate be no less than the greater of $1,000,000 or 10% of the amount of the
				applicant's revenue for its most recently completed 12-month fiscal year. That
				amount of revenue must appear in the applicant's certified financial statements, or
				those of the applicant's parent, that have received an accountant's report that
				certifies those financial statements to be free of material misstatement. If the
				applicant is using the certified financial statements of its parent, the minimum
				required amount of credit available under the credit agreements shall be determined
				using the applicable revenue amount from the segment information section of the
				certified financial statements of the applicant's parent.
i) If the applicant is listed separately in the
				segment information section, the applicant's revenue shall be used; or
ii) If the segment information section is broken
				down by operation, or other means, the revenue for the entire segment of which the
				applicant is part shall be used, unless a certified breakdown of the segment by
				company is provided; or
iii) In the
				alternative, the applicant's revenue from sales to Illinois retail customers may be
				used. In these circumstances, the revenue from sales to Illinois retail customers
				must be provided in the certified financial statements or in internal documents
				accompanied by a verified statement from a company officer.
B) The credit agreements shall be valid for a
				period of not less than one year.
C) The
				applicant shall provide a copy of the following:
i) A schedule, with references to each input of
				the calculation, showing the currently available amount of each line of credit,
				including all deductions resulting from any covenants or other limitations governing
				each agreement;
ii) The credit
				agreements;
iii) The certified financial
				statements, including the accountant's report, of the applicant or those of the
				applicant's parent, as applicable;
iv)
				If the applicant's revenue from sales to Illinois retail customers is to be used,
				the applicant must submit certified financial statements that present this
				information, or internal documents that present this information and a verified
				statement from a company officer attesting to the accuracy of those internal
				documents; and
v) A schedule showing the
				calculation of 10% of revenue with a reference to the applicant's certified
				financial statements or internal documents, as applicable, provided for the revenue
				input of the calculation.
3) The applicant demonstrates and certifies it is
				a member of one or more RTOs and purchases 100% of its physical electric energy from
				the RTOs for delivery to the service territories of the utilities for which the
				applicant is seeking a certificate.
4)
				The applicant shall execute and maintain an unconditional guarantee, payment bond,
				or letter of credit that, upon failure to comply with its contractual obligations to
				supply energy to its customers, shall be payable to the People of the State of
				Illinois. Any dollar limitation on the unconditional guarantee, payment bond, or
				letter of credit shall equal not less than the product of 1080 times the applicant's
				expected peak hourly demand expressed in MWs over the next twelve months times the
				average of the 45 highest daily market prices of electric energy traded during the
				previous year. Each February, the Commission shall choose a published price index
				for electricity for use in this subsection (a)(4). The daily market price of
				electric energy shall equal the published price index for electricity traded in
				Illinois, except in the event that no price index for electricity traded in the
				State of Illinois is published, then the daily market price of electricity shall be
				determined by the use of a published price index for electricity traded at the
				nearest location to the State of Illinois. The unconditional guarantee, payment
				bond, or letter of credit shall be valid for a period of not less than one year. All
				payments to be made through the unconditional guarantee, payment bond, or letter of
				credit under this Section shall be paid in accordance with a Commission Order
				authorizing the payment.
A) Unconditional
				Guarantee. The guarantor shall maintain at least one of the following commercial
				paper ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or
				higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch
				Ratings or its successor; or at least one of the following long-term credit ratings:
				BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from
				Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or
				its successor. The applicant shall provide a copy of the following:
i) The unconditional guarantee;
ii) The ratings agency report that presents the
				applicable ratings of the guarantor; and
iii) A good faith estimate of the applicant's
				expected peak hourly demand expressed in MWs over the next 12 months.
B) Payment Bond. The payment bond or
				payment bonds shall be issued by a qualifying surety authorized to transact business
				in the State of Illinois or by a surety whose Best's rating is A- or better, whose
				Best's financial size category is VII or larger, and whose contract of insurance is
				issued pursuant to Section 445 or 445a of the Illinois Insurance Code and
				countersigned by the Surplus Line Association of Illinois or its successor. The
				applicant shall provide a copy of the following:
i) The payment bonds or the contract of insurance
				with the countersignature of the Surplus Line Association of Illinois or its
				successor as applicable;
ii)
				Documentation demonstrating that the surety issuing the payment bond is a qualified
				surety authorized to transact business in the State of Illinois or a surety with a
				satisfactory Best's rating and financial size category, as applicable; and
iii) A good faith estimate of the applicant's
				expected peak hourdly demand expressed in MWs over the next 12 months.
C) Letter of Credit. The letter of
				credit shall be irrevocable and issued by a financial institution with a long-term
				obligation rating of A- or higher from Standard & Poor's or its successor, A3 or
				higher from Moody's Investors Service or its successor, or A- or higher from Fitch
				Ratings or its successor. The applicant shall provide a copy of the following:
i) The letter of credit;
ii) The ratings agency report that presents the
				long-term obligation rating of the financial institution extending the credit;
				and
iii) A good faith estimate of the
				applicant's expected peak hourly demand expressed in MWs over the next twelve
				months.
5) The
				applicant maintains a line of credit or revolving credit agreement.
A) The line of credit or revolving credit
				agreement must be from a financial institution with a long-term obligation rating of
				A- or higher from Standard & Poor's or its successor, A3 or higher from Moody's
				Investors Service or its successor, or A- or higher from Fitch Ratings or its
				successor.
B) The amount of the line of
				credit or revolving credit agreement shall be no less than the greater of $1,000,000
				or 10% of the amount of the applicant's revenue for the most recently completed
				12-month fiscal year. That amount of revenue must appear in the applicant's
				certified financial statements, or those of the applicant's parent, that have
				received an accountant's report that certifies those financial statements to be free
				of material misstatement. If the applicant is using the certified financial
				statements of its parent, the minimum required amount of credit available under the
				line of credit or revolving credit agreement shall be determined using the
				applicable revenue amount from the segment information section of the certified
				financial statements of the applicant's parent.
i)
				If the applicant is listed separately in the segment information section, the
				applicant's revenue shall be used.
ii)
				If the segment information section is broken down by operation, or other means, the
				revenue for the entire segment of which the applicant is part shall be used, unless
				a certified breakdown of the segment by company is provided.
C) The line of credit or revolving credit
				agreement shall be valid for a period of not less than one year.
D) The applicant shall provide a copy of the
				following:
i) The line of credit or revolving
				credit agreement;
ii) The ratings agency
				report that presents the long-term obligation rating of the financial institution
				extending the credit;
iii) The certified
				financial statements, including the accountant's report, of the applicant or those
				of the applicant's parent, as applicable; and
iv) A schedule showing the 10% of revenue
				calculation, with a reference to the applicant's certified financial statements
				provided for the revenue input of the calculation.