Please note sections 4.8.2 and 4.9.1 of the RFP Rules provide for a process by which bidders can propose modifications to the Bid Assurance and Performance Assurance Letters of Credit. Please refer to the list of acceptable modifications to these credit instruments posted on the Supplier Documents page of the RFP Web site.  These documents will be updated no later than seven business days prior to the Bid Proposal Due Date.

The contact information for the beneficiary is as follows:

Company Name: PPL Electric Utilities Corporation
Full Address: Two North Ninth Street, Allentown, PA 18101
Contact Name: Douglas R. Stinner
Telephone Number: 610-774-5568
Fax Number: 610-774-5694

The credit instruments that were standard in the previous solicitation have not changed for this solicitation. The list of acceptable proposed modifications to the credit instruments will be updated no later than seven business days prior to the Bid Proposal Due Date. Modifications approved for use in the previous solicitation will be approved for use in this solicitation.

The current report you receive for the MtM exposure will be revised to incorporate any new products and solicitations, including the Long-term Product. If you win any blocks of the Long-term Product, it will be shown on a separate line in the report.

If you are an existing supplier and have submitted an executed guaranty for load won in a prior solicitation in PPL Electric's Default Service Procurement Plan (DSPP), then you may amend the existing guaranty amount to account for any additional load that is won in a subsequent solicitation under the DSPP to satisfy the performance assurance requirements under the Supply Master Agreement(s).

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.

The Bid Assurance Letter of Credit and the Performance Assurance Letter of Credit contain the following provision:

The term “Subsequent Period” refers to the time period starting from the time when the beneficiary has a right to draw on the Letter of Credit but did not do so through the expiration date specified on the Letter of Credit.

No. As stated in section 4.7.1. of the AEC RFP Rules, bid assurance collateral must be in the amount of $25,000 per product for which the bidder is submitting a bid. For example, if a bidder is submitting a bid for all three products (i.e., Tier I (non-solar), Tier I (solar) and Tier II), the bidder must provide bid assurance collateral in an amount of $75,000.

In regard to participation in the AEC RFP, the bid assurance collateral requirement is $25,000 per AEC product in the AEC RFP.  The purpose of this collateral is to assure commitment of the RFP Bidder to execute the Transaction Confirmations for the Products awarded to the RFP Bidder.  PPL Electric will hold the Bid Assurance Collateral until either the RFP Bidder is notified that it has not been awarded quantities for a solicitation or until the RFP Bidder executes the transaction Confirmation forms upon being awarded quantities. Upon either of the above two 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 an LOC will be returned within two (2) business days.

During the delivery period, all winning AEC suppliers will be subject to performance assurance requirements, which are described in Article 12 of the AEC Supply Master Agreement.  Please see Contracts/AEC FAQ-4 for more information.

The calculation provided on slide 16 of the Bidder Information Presentation dated March 31, 2011 represents the credit exposure under the SREC SMA that is incurred upon the full execution of a Transaction Confirmation under the SREC SMA. Please note that for purposes of calculating the Aggregate Buyer's Exposure under the SREC SMA, credit exposures are netted across all other Supply Master Agreements under PPL Electric Default Service Procurement Plan between the Seller and PPL Electric. Assuming that the Seller is only a party to the SREC SMA, then the calculation described on slide 16 of the Bidder Information Presentation reflects the Aggregate Buyer's Exposure. The timing and process for delivering performance assurance collateral is described in Section 12.1 and Section 12.2 of the SREC SMA.

Should an Event of Default that is attributable to the Seller occurs, the Seller will be responsible for damages under the SREC SMA including, but not limited to, for each SREC not delivered, any positive difference between the contracted price of the SRECs and the price at which PPL Electric replaces the SRECs, or the alternative compliance payment required by the AEPS Act.

Can you confirm our understanding of the credit exposure calculation as of 12/1/2011 and amount of required Performance Assurance LOC using the following assumptions:

(a) Months remaining in Delivery Period: 102 SRECs won: 3,000
(b) $/SREC: $200

Credit Exposure as of 12/1/11:  3,000 x $200 x 4.5% = $27,000