Illinois Administrative Code
Title 83 - PUBLIC UTILITIES
Part 451 - CERTIFICATION OF ALTERNATIVE RETAIL ELECTRIC SUPPLIERS
Subpart B - PROCEDURES FOR APPLICANTS SEEKING TO SERVE ONLY NONRESIDENTIAL RETAIL CUSTOMERS WITH MAXIMUM ELECTRICAL DEMANDS OF ONE MEGAWATT OR MORE
Section 451.110 - Financial Qualifications under Subpart B
Universal Citation: 83 IL Admin Code ยง 451.110
Current through Register Vol. 48, No. 12, March 22, 2024
a) An applicant shall be deemed to possess sufficient financial capabilities to serve non-residential retail customers with maximum electrical demand of one megawatt or more if the applicant 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 $500,000 or 5% 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 as follows:
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.
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 agreement 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 applicant's certified financial
statements, including the accountant's report, 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 5% of revenue
calculation, with a reference to the applicant's certified financial statements,
certified letter from an officer of the applicant verifying Illinois revenue, 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 12 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 such 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 rating 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 and
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
[215 ILCS 5/445 or 445 a] 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 hourly 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 $500,000
or 5% of the amount of 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 5% of revenue
calculation, with a reference to the applicant's certified financial statements
provided for the revenue input of the calculation.
b) An applicant that will provide electric power and energy with property, plant, and equipment that it owns, controls, or operates shall have in force, and provide proof that it has in force, general liability insurance that shall remain in effect for a period of not less than one year.
1) The applicant shall be deemed to
have sufficient commercial general liability insurance if that coverage is in the
amount of at least $100,000,000. The commercial general liability insurance must be
maintained with insurance companies assigned Best's ratings of A- or better and
Best's financial sizes of VII or larger.
2) The applicant shall provide a certificate of
insurance as part of its application for certification. If the applicant or ARES
renews or makes changes in its insurance coverage, the insurance coverage must be
continuous and without interruption. The certificate of insurance and the insurance
policies shall contain a provision that coverage afforded under the policies shall
not be cancelled, allowed to expire, or subjected to a reduction in the limits in
any manner unless at least 30 days prior written notice (10 days notice in the case
of nonpayment of premium) has been given to the Commission.
Disclaimer: These regulations may not be the most recent version. Illinois may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.