If a Project has a winning bid that is approved by the Commission, upon contract execution with a Company, the Collateral Requirement required for that Company is 50% of the annual contract value. The annual contract value is the winning bid price times the annual quantity. The Collateral Requirement under the terms of the REC Contract increases to 100% of the Annual Contract Value for a Company on June 1, 2019. The increase occurs regardless of when the project becomes operational or when the first REC is delivered.
The REC Contracts must be fully executed with all companies within three business days of the Commission decision to approve the results of the procurement event. The creditworthiness requirements of the REC Contract must be met by the Seller within five (5) business days of such ICC decision. If the Seller or its Guarantor does not qualify for an unsecured line of credit under the REC Contract, then the amount of the Collateral Requirement must be provided in the form of cash or a letter of credit within five (5) business days of the Commission decision to approve the results of the procurement event.