1 / 6

Creditworthiness Procedures

Creditworthiness Procedures. Background. Firm Electric Service Contracts Minimal risk to Western historically OATT Provisions for Creditworthiness Attachment Q Changing industry standards. Creditworthiness. Western’s regions are implementing

Download Presentation

Creditworthiness Procedures

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Creditworthiness Procedures

  2. Background • Firm Electric Service Contracts • Minimal risk to Western historically • OATT Provisions for Creditworthiness • Attachment Q • Changing industry standards

  3. Creditworthiness • Western’s regions are implementing • Language added to new FES contracts under marketing plan extensions • Multi-Year Implementation Across Western • Cover 70% of revenue sources within 3 years • SLCA/IP Contracts – Amendment needed

  4. SLCA/IP Contract Implementation • Address only Creditworthiness Issue • Language will be adopted from that currently used in other Western regions • Consistent with Western’s policies, but adjusted for any SLCA/IP considerations • Draft language will be shared with customers before any implementation

  5. Provisions of Creditworthiness • Notify Western of Adverse Change in Condition • (Credit Downgrade, Resignations, Default, Bankruptcy) • FES Customer Considered Creditworthy, provided: • Payments are current to Western • Credit rating is better than investor grade (BB) • No bankruptcy • Rates can be set to recover costs • If there is a risk, credit limits will be set. • (e.g., 5 months worth of estimated charges.)

  6. Provisions of Creditworthiness • Collateral May be Required – Based on Risk • Pre-payment of future charges • Irrevocable Letter of Credit, Corporate Guaranty • Failure to Provide Collateral • Western will suspend contract, after notice period • Suspension only as long as circumstances persist • Customer May Contest Any Determination by Western

More Related