Credit

The solicitation date for the April 2017 solicitation is April 4, 2017.

That is correct for any entity seeking to rely on the creditworthiness of a foreign guarantor. The executed guaranty along with the documents required under Section 6.4(d) of the Default Service SMA such as the executed legal opinion and sworn certificates must be accepted by PPL Electric first before any unsecured credit may be granted to the default service supplier based on the creditworthiness of the foreign guarantor. In support of this, RFP Bidders may, but are not required to, submit with Bidder Qualifications a draft of the documents required under Section 6.4(d) of the Default Service SMA for review.  If a draft of the documents for evaluation are submitted, the RFP Manager will provide feedback on the evaluation of these documents to the RFP Bidder when  the RFP Bidder is notified of its status as a Qualified Bidder.

RFP Bidder can elect in the Credit Application that the RFP Bidder does not seek to be granted unsecured credit line under the Default Service SMA or rely on a Guarantor’s creditworthiness.

There are minor differences between the Unconditional Guaranty under PPL Electric’s DSP III and DSP IV, and should the RFP Bidder be a winning Supplier in any of the PPL Electric's RFPs under DSP IV, the RFP Bidder will be required to provide a new Unconditional Guaranty to replace the current Unconditional Guaranty held by PPL Electric pursuant to a Default Service SMA under DSP III.

Sections 4.9.1 of the RFP Rules provides for a process by which bidders can propose modifications to the Performance Assurance LOC and/or Unconditional Guaranty. As part of its Bidder Qualifications, an applicant may propose modifications to the standard Performance Assurance LOC and/or Unconditional Guaranty form that are non-substantive or clarifying in nature. The applicant proposing modifications to the Performance Assurance LOC or the Unconditional Guaranty form must provide an electronic copy in MS Word with all proposed modifications clearly marked as an upload to the Qualification Form during the Bidder Qualification process. The acceptability of such proposed modifications will be at PPL Electric’s sole discretion, and such acceptability will be communicated to the applicant no later than forty-eight hours before the Cure Deficiency Deadline. All proposed modifications are due by noon on the Bidder Qualifications Due Date.

Documents containing acceptable modifications to credit instruments have been posted to the “Documents” page under the “RFP Information” section of the RFP website.

No. For purposes of Bid Assurance Collateral, RFP Bidders may only provide Bid Assurance Collateral either in the form of cash or in the form of Bid Assurance Letter of Credit.

Bid assurance collateral will be returned to the RFP Bidder subsequent to the Commission decision regarding the results of the solicitation in accordance with Section 5.4 of the RFP Rules.

Credit exposure for Spot Market Transactions under the Default Service SMA is calculated as the product of $75,000 and the total number of tranches awarded to DS Supplier for tranches in the Large C&I Customer Group. This credit exposure amount is maintained through the term of the transaction and will decrease to zero only after the delivery period.

Wire transfer information will be provided only to Qualified Bidders upon request.

No. Bid Assurance collateral must be in the form of cash or Letter of Credit.

RFP Bidders may provide Bid Assurance Collateral either in the form of cash or in the form of Bid Assurance Letter of Credit. The schedule for when the Bid Assurance Collateral is due is provided in the RFP Addendum for this solicitation available on the RFP Schedule page of the website. The RFP Manager will provide upon request wire transfer instructions to Qualified Bidders who intend to post cash for their Bid Assurance Collateral. Qualified Bidders who intend to post a letter of credit for Bid Assurance Collateral must send the bid assurance letter of credit ONLY to the PPL Electric RFP Manager’s office at the following address: Attn: NERA / PPL Electric RFP Manager 1835 Market Street, Suite 1205 Philadelphia, PA 19103

Bid Assurance Collateral is not a fee for participating in the RFP. PPL Electric will hold the Bid Assurance Collateral until either the RFP Bidder is notified by PPL Electric that it has not been awarded bids for a solicitation or until the RFP Bidder executes the Transaction Confirmation forms upon the Commission accepting its bids. Upon either of the above conditions, bid assurance collateral in the form of cash will be returned within one (1) business day, and Bid Assurance Collateral in the form of a letter of credit will be returned within two (2) business days.

The Bid Assurance Collateral will be forfeited if the Bidder is notified by PPL Electric that it has been awarded bids for a solicitation and the RFP Bidder does not execute the Transaction Confirmation forms in a timely manner.

Yes, there is a single posting of Bid Assurance Collateral in each solicitation.

Performance Assurance Letter of Credit and Unconditional Guaranty are provided as Exhibit 4 and Exhibit 5 to the Default Service SMA respectively on the Documents page of the RFP website.

The “solicitation date” is simply the Bid Proposal Due Date in the particular solicitation (e.g., for the October 2017 solicitation, this would be October 10, 2017). If the bidder would like to use the same Bid Assurance Letter of Credit for future solicitations under DSP IV, there is no need to modify the “Solicitation Date” so you may leave the date blank, and the RFP Manager will process the Bid Assurance Letter of Credit as is.

The “solicitation date” is simply the Bid Proposal Due Date in the particular solicitation (e.g., for the April 2018 solicitation, this would be is April 10, 2018). If the bidder would like to use the same Bid Assurance Letter of Credit for future solicitations under DSP IV, there is no need to modify the “Solicitation Date” so you may leave the date blank, and the RFP Manager will process the Bid Assurance Letter of Credit as is.

Yes, sections 4.9.1 of the RFP Rules provides for a process by which bidders can propose modifications to the Bid Assurance Letter of Credit, Performance Letter of Credit and/or Unconditional Guaranty. As part of its Bidder Qualifications, an applicant may propose modifications to the standard Bid Assurance Letter of Credit, Performance Letter of Credit and/or Unconditional Guaranty form(s) that are non-substantive or clarifying in nature. The applicant proposing modifications to the Bid Assurance Letter of Credit, Performance Letter of Credit and/or Unconditional Guaranty form(s) must provide an electronic copy in MS Word with all proposed modifications clearly marked using tracked changes either by an upload to the Qualification Form or by email to PPL-procurement@NERA.com. The acceptability of such proposed modifications to the Bid Assurance Letter of Credit, Performance Letter of Credit and/or Unconditional Guaranty form(s) will be at PPL Electric’s sole discretion, and such acceptability will be communicated to the applicant no later than forty-eight hours before the Cure Deficiency Deadline.  All proposed modifications are due by noon on the Bidder Qualifications Due Date.

No, this is not necessary. As stated in Section 4.5.5 of the RFP Rules, an RFP Bidder that is not seeking to be granted unsecured credit under the Default Service SMA is not required to provide any of the supporting documents to the Credit Application. Please also see Credit-FAQ-4 for information.

First, while the set of additional documents (such as the legal opinion and sworn certificates) listed in Section 6.4(d) of the Default Service SMA are required for the foreign guarantor to be granted unsecured credit, the RFP does not require the RFP Bidder to provide such documents during the RFP process. Pursuant to the Section 4.5.4 of the Default Service RFP Rules, the RFP Bidder may, but is not required to, submit with its Bidder Qualifications a draft of additional documents required for the foreign Guarantor for review. If an RFP Bidder submits a draft of the documents for evaluation, the RFP Manager will provide the evaluation from PPL Electric to the RFP Bidder on the Qualified Bidders Notified Date. These documents must meet the requirements spelled out in Section 6.4(d) of the Default Service SMA. It is expected that the evaluation will either indicate that the form of the draft documents would be acceptable or indicate areas of deficiency that must be addressed for the documents to be acceptable. It is not anticipated that calls would be necessary. If the RFP Bidder is awarded tranches in the Default Service RFP, the RFP Bidder as Seller may provide these documents to PPL Electric directly for consideration during the term of the Default Service SMA.

If an RFP Bidder is relying on the financial standing of a foreign Guarantor and should the RFP Bidder be a winner of the Default Service RFP, then the RFP Bidder must execute the Unconditional Guaranty and provide the executed legal opinion and sworn certificates in order for the foreign guarantor to be granted unsecured credit under the Default Service SMA. The RFP Bidder may also provide a Performance Assurance Letter of Credit or Cash to satisfy the creditworthiness requirements of the Default Service SMA as these requirements are set forth in the Default Service SMA, including in Section 6 of the Default Service SMA.

The RFP Manager confirms receipt of Bid Assurance Letters of Credit on the day of receipt.

Bid Assurance Collateral can be provided in the form of cash or a Bid Assurance Letter of Credit. If the RFP bidder is provided a letter of credit, then the original executed Bid Assurance Letter of Credit must be delivered to the following address:

PPL Electric Utilities Corporation

2 North Ninth Street (TW20)

Allentown, PA 18101

Attn: James M. Rouland, Regulatory Policy Manager

RFP Bidders who are not able to deliver an original executed Bid Assurance Letter of Credit should consider providing Bid Assurance Collateral in the form of cash. Please see our announcement sent on March 18, 2020 on this matter.

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.

No, PPL Electric will not accept letters of credit submitted electronically. Please see our announcement sent on September 21, 2020 on this matter.

In accordance with Section 6.1.2 of the RFP Rules, PPL Electric is no longer accepting drafts of Bid Assurance Letters of Credit. If you wish to make modifications, please refer to the Acceptable Modifications to Bid Assurance Letter of Credit file, posted to the Documents page of the RFP website. Please also see Credit-FAQ-19.