Your current understanding is correct. Under the current draft of the Preliminary Proposal Requirements, a participant is required to submit a letter of credit to each utility to support its bids. The letter of credit for each utility must be in an amount of $5,000/MW of wind projects and $15,000/MW of solar projects for which bids will be presented, subject to a $25,000 minimum for each letter of credit. Please note that, however, the RFP Rules for the Wind and Solar RFP have not yet been finalized and the currently drafted requirements could change.
Additionally, it is important to note that the Letters of Credit to support the bid will be cancelled and returned to the bidder (and not held during the term of the contract). If the bidder is not a winning bidder in the RFP, such cancellation and return will occur as soon as practicable after the Commission decision on the results of the procurement event. If the bidder is a winning bidder in the RFP and the winning bidder will sign a REC Contract with a Company, such cancellation and return will occur once all formalities of contract execution with the Company have been completed and once all suppliers fees have been paid to the IPA.
While the REC Contract is also still under development, there will be separate collateral requirement for winning bidders upon signing the contract. Under the current draft, prior to the first REC delivery, the collateral requirement is half of the Annual Contract Value (Annual REC Quantity x Purchase Price) or $50,000, whichever is greater. After the first REC delivery, the collateral requirement is reduced to 1 time the Annual Contract Value or $50,000, whichever is greater. Finally, the collateral requirement in the last delivery year is reduced to reflect the amount that will be delivered in that delivery year (which may be less than a full year).
Please see FAQ-W&S-26 for an example calculation of the collateral requirement prior to first REC delivery.