Section 451.510  Financial Qualifications under Subpart F

An applicant may request authorization from the Commission to provide single billing services at the time it seeks certification as an ARES or at any time thereafter.  However, under no circumstances may an ARES provide single billing services without authorization from the Commission. An applicant that seeks to provide single billing services shall demonstrate an ability to establish and maintain sufficient financial resources to satisfy the obligation to remit to utilities monies that the ARES collects under single billing tariffs adopted pursuant to Section 16-118(b) of the Act. The applicant for single billing services may demonstrate this credit worthiness in one of four ways:

a)         The applicant may undertake to post and maintain a bond or bonds issued by a qualifying surety or financial institution chartered by the United States or the State of Illinois in favor of any Illinois utility in whose service territory the applicant will serve retail customers.  The bond or bonds shall be in an amount equal to 15% of a good faith estimate of the total amount that the applicant expects to be obliged to pay to the utility under single billing tariffs adopted pursuant to Section 16-118(b) of the Act during the next twelve months.  The applicant shall provide a copy of the bonding agreements and the bonds to the Commission with the application to provide single billing service.  The bonds shall be conditioned on the full and timely payment of all amounts due to the utility in accordance with the terms specified in the single billing tariffs and shall be valid for a period of not less than one year.

b)         The applicant may deliver an irrevocable letter of credit issued by a financial institution with a long-term obligation rating of A- or higher from Standard & Poor's or its successor, A3 or higher from Moody's Investors Service or its successor, or A- or higher from Fitch Ratings or its successor in the same amount and in favor of the same parties as the bond that would otherwise be required.  The letter of credit shall provide that a draft will be honored in accordance with the terms specified in the single billing tariffs.  The letter of credit shall be valid for a period of not less than one year.  The applicant shall provide a copy of the letter of credit and the ratings agency reports that present the long-term obligation ratings of the issuer of the letter of credit to the Commission with the application to provide single billing service.

c)         The applicant maintains at least 2 of the following commercial paper ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least two of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor.  The applicant shall provide a copy of the ratings agency reports that present applicant's ratings to the Commission with its application to provide single billing service.

d)         All obligations of the applicant to Illinois utilities are unconditionally guaranteed by a counterparty that maintains at least two of the following commercial paper ratings: A-2 or higher from Standard & Poor's or its successor, P-2 or higher from Moody's Investors Service or its successor, or F-2 or higher from Fitch Ratings or its successor; or at least two of the following long-term credit ratings: BBB- or higher from Standard & Poor's or its successor, Baa3 or higher from Moody's Investors Service or its successor, or BBB- or higher from Fitch Ratings or its successor.  The unconditional guarantee shall be valid for a period of not less than one year. The applicant shall provide a copy of the ratings agency reports that presents these ratings of the counterparty and a copy of the guarantee to the Commission with its application.

(Source:  Amended at 34 Ill. Reg. 15283, effective September 25, 2010)