Credit
Archived Frequently Asked Questions
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FAQ-1. What are the changes in the Bid Assurance Letter of Credit used between DSP IV and DSP V?
The April 2021 Solicitation will feature a Default Service RFP and a Default Service Block Supply RFP. Each RFP features a separate Letter of Credit. If the RFP Bidder is participating in more than one RFP, the RFP Bidder must provide a separate Bid Assurance Letter of Credit for each RFP.
The form of the Bid Assurance Letter of Credit used under DSP IV is different to the forms of the Bid Assurance Letter of Credit used under DSP V. An acceptable Hardcopy Bid Assurance Letter of Credit is provided as Appendix 7a, and an acceptable Electronic Bid Assurance Letter of Credit form that allows for electronic issuance and presentation of documents is provided as Appendix 7b, which are posted on the Documents page under the Default Service RFP and the Block Supply RFP tabs, respectively, on PPL Electric’s RFP website.
FAQ-2. Is cash an acceptable form of Bid Assurance Collateral?
For purposes of Bid Assurance Collateral, RFP Bidders may provide Bid Assurance Collateral either in the form of cash or in the form of a Bid Assurance Letter of Credit.
FAQ-3. Can the cash posting for bid assurance collateral be secured by an escrow account?
Each RFP Bidder must provide liquid Bid Assurance Collateral to support its Bid Proposal(s) in the form of either cash or an irrevocable LOC. Wire transfer instructions for RFP Bidders who intend to provide Bid Assurance Collateral in the form of cash is available upon request from the RFP Manager. This information is also provided in the online Collateral and SMA form.
FAQ-4. The Bid Assurance Letter of Credit (Electronic) states that “drafts, documents and other communications hereunder may be presented or delivered to us by email or by any other electronic means.” Can you clarify what “or by any other electronic means” means? The Bid Assurance Letter of Credit (Electronic) also states “6. The beneficiary shall not be deemed to have waived any rights under this letter of credit, unless the beneficiary or an authorized agent of the beneficiary shall have signed a dated written waiver. No such waiver, unless expressly so stated therein, shall be effective as to any transaction that occurs subsequent to the date of the waiver, nor as to any continuance of a breach after the waiver.” Can you clarify who is the “authorized agent of the beneficiary”?
The reference to “or by any other electronic means” includes other such applications that allow for the transfer of data or information, such as PPL Electric’s Files2U system (found at: https://files2u.pplweb.com/).
The use of the phrase “an authorized agent of the beneficiary” is in reference to a third party identified by the Beneficiary, to act on its behalf. At this time, PPL Electric has not made any such election or assignment, and is instead a general reference should such an event take place in the future.
FAQ-5. For purposes of the performance assurance letter of credit, can you please explain the criteria or requirements the issuing bank must meet in order to issue a letter of credit that is acceptable to PPL Electric?
Please see section 6.7(b) of the Default Service SMA for the requirements related to the performance assurance letter of credit. A standby irrevocable letter of credit issued by a bank or other financial institution that meets these minimum credit requirements set forth in the Default Service SMA would be acceptable to PPL Electric.
FAQ-6. Can we provide a draft version of the Bid Assurance Letters of Credit for review prior to our bank issuing the final executed version?
Neither the RFP Manager nor PPL Electric review draft versions of Bid Assurance Letters of Credit. Please see Qualifications-FAQ-4 for additional information on the deadline to submit proposed modifications to the Bid Assurance Letter of Credit, pasted below for your convenience.
If the submitted Bid Assurance Letter of Credit, in its current format, is not acceptable to PPL Electric, the RFP Manager will provide a deficiency notice requesting an amendment to your Bid Assurance Letter of Credit and will provide a deadline for receipt of such amendment. Please note, PPL Electric has posted the final lists of acceptable modifications to the Bid Assurance Letter of Credit (Electronic) to the Documents page of the Default Service RFP section of the RFP website.