BEC-18: The entity that we are considering naming as our guarantor is not rated. Can such an entity serve as guarantor? If not, can we still participate in the RFP?

Under the Block Energy and Capacity (“BEC”) RFP, an entity that is not rated by any of the following rating agencies: S&P Global Ratings (“S&P”), Moody’s Investors Service (“Moody’s”), and Fitch Ratings (“Fitch”), receives a Collateral Threshold Amount of zero. Such an entity does not receive unsecured credit under the applicable BEC contract cannot serve as a Guarantor.

However, it is not a condition of participation in the RFP that the supplier itself be rated or that the supplier have a guarantor that is rated.  If a supplier that is not rated and that does not have a guarantor has bids that are approved by the Commission, then such a supplier would have post cash or a letter of credit to meet the collateral requirement under the applicable BEC contract.

Posted 4/2/2019; amended 6/12/2019