Pennsylvania Code › Title 52 - PUBLIC UTILITIES › Part I - Public Utility Commission › Subpart C - Fixed Service Utilities › Chapter 54 - ELECTRICITY GENERATION CUSTOMER CHOICE › Subchapter B - ELECTRICITY GENERATION SUPPLIER LICENSING › Section 54.40 - Bonds or other security

Current through Register Vol. 54, No. 28, July 13, 2024
(a) A license
					 will not be issued or remain in force until the licensee furnishes a bond or
					 other security approved by the Commission. See section 2809(c) of the code
					 (relating to requirements for electric generation suppliers).
(b) The purpose of the security requirement
					 is to ensure the licensee's financial responsibility, the payment of gross
					 receipts tax as required by section 2810 of the code (relating to
					 revenue-neutral reconciliation), and the supply of electricity at retail in
					 accordance with contracts, agreements or arrangement. See section 2809(c) of
					 the code.
(c) The initial security
					 level required from each applicant is $250,000. Modifications of this amount
					 commensurate with the nature and scope of business anticipated to be conducted
					 in this Commonwealth may be granted where substantial evidence is submitted in
					 support of the modification. A request for modification of this initial
					 security level may be made in conjunction with the filing of the application.
					 The license will be issued contingent on the submission of proof that the
					 applicant has obtained a bond, or other approved security in the amount
					 directed by the Commission.
(d)
					 After the first year that the license is in effect, the security level for each
					 licensee will be reviewed annually and modified primarily based on the
					 licensee's reported annual gross receipts information. The security level will
					 be 10% of the licensee's reported gross receipts. See section 2809 (c)(1)(i) of
					 the code. Maintenance of a license will be contingent on the licensee providing
					 proof to the Commission that a bond or other approved security in the amount
					 directed by the Commission has been obtained. A licensee may seek approval from
					 the Commission of an alternative level of bonding commensurate with the nature
					 and scope of its operations.
(e)
					 Payments pursuant to the security may result from the licensee's failure to pay
					 the full amount of Gross Receipt Taxes, or failure to supply electricity or
					 other services in accordance with contracts, agreements or
					 arrangements.
(f) The bond or
					 security shall include the following:
(1) The
					 Pennsylvania Public Utility Commission, Commonwealth as the sole
					 beneficiary.
(2) The purpose of the
					 bond as follows:
This bond (or other security) is written in accordance
						with Section 2809(c)(1)(i) of the Public Utility Code,
						66 Pa.C.S. §
														2809(c)(1)(i), to assure
						compliance with applicable provisions of the Public Utility Code,
						66 Pa.C.S. §
														§
														101, et seq., and the rules and regulation of
						the Pennsylvania Public Utility Commission by the Principle as a licensed
						electric generation supplier; to ensure the payment of Gross Receipts Tax as
						required by Section 2810 of the Public Utility Code,
						66 Pa.C.S. §
														2810;
						and to ensure the supply of electricity at retail in accordance with contracts,
						agreements or arrangements.
(3) A listing of the prioritization of claims
					 for payment under the security from highest priority to lowest priority as
					 follows:
(i) The Commonwealth.
(ii) EDCs for the reimbursement of Gross
					 Receipts Tax.
(c) Private
					 individuals.
(4) A
					 statement that the security shall be interpreted under law of the Commonwealth,
					 or in the alternative, no choice of law is specified.