The collateral requirement under each of the supplier contracts for the energy procurement events is based on a mark-to-market methodology. For the (AIC) Confirmation Agreement and the (MEC) Confirmation Agreement, this methodology is described in Exhibit D (Collateral Annex) together with Exhibit E (Paragraph 10 to the Collateral Annex), of each agreement. For the (ComEd) Master Agreement, this methodology is described in Schedule 3 (MtM Calculation) to the Collateral Annex. Under the applicable supplier agreement, the Bidder or a Guarantor, if applicable, may be granted unsecured credit based on a creditworthiness assessment. The creditworthiness assessment is based on the Bidder’s (or Guarantor’s, as applicable) financial statements and credit ratings submitted with the Part 1 Proposal and the result of the assessment will be provided to the Bidder with the Part 1 Notification.
If the Bidder is relying on the creditworthiness of a Guarantor, an executed guaranty acceptable to the Buyer must be provided. Any required performance assurance must be posted in the form of cash or a letter of credit. The standard forms of the guaranty and the letter of credit are appended to each of the contracts.