The Illinois Power Agency procurement plan, as approved by the ICC, seeks to procure financial swap products for the following total contract quantities (in MW) and terms during the period June 1, 2010, through May 31, 2013:
The products to be procured are financially settled fixed for floating electricity swaps. The floating price will be calculated as the average MISO Day-Ahead LMP for each hour of each settlement month at the Ameren Illinois Utilities Load Zone. The parties will then net the difference between the agreed upon fixed price and the floating price.
(Pre-Qualified Bidders Only)
The following documents are intended to offer those who execute contracts additional optionality with respect to Letters of Credit and Guaranties. The documents are redlined to indicate their differences from the versions found in the Confirmation Agreement linked above.
Note: New acceptable modifications from the draft are numbered 7 and 8
Note: New acceptable modifications from the draft are numbered 5, 6 and 7
The Pre-Qualification Application requires a signature from an Authorizing Officer. Electronic and faxed signatures will be accepted. The application can be submitted via email to firstname.lastname@example.org, via fax to 617-531-2826, or via courier to Levitan & Associates, Inc., Attn: Sara Pierce, 100 Summer St. Ste. 3200, Boston, MA 02110.
Additional documents can be found on the Procurement Information page.
Submit a Question
Will bidders receive a preliminary notice of whether or not they have bids in the award group recommended to the ICC?
No, there will be no preliminary notifications. Bidders will be notified of all awards following the ICC's ruling on the Procurement Administrator's recommendations, which will occur on either Thursday, May 6th, or Friday, May 7th.
If a bidder has already executed a guaranty as a result of the 2010 Capacity procurement, does that bidder need to execute a separate Guaranty if they are successful in the Energy auction?
If the bidder is awarded contracts following the energy bidding, the bidder will be able to modify its existing capacity guaranty in order to provide a single guaranty to cover all capacity and energy agreements. The language is provided within "Schedule 2 to Form of Guaranty." Essentially this will require the insertion of the correct dates for the bidder's capacity and energy Confirmation Agreements near the top of the first page of the guaranty. In addition, if the bidder is awarded energy contracts, they can feel free to contact the Utilities' Credit group in order to get clarification on any questions they may have.
Can the modifications shown in Schedule 1 to the Form of Guaranty be made to Schedule 2 to the Form of Guaranty?
Yes, with the understanding that if the bidder wishes to use Modification #1 of Schedule 1, the bidder will need to change "Guaranteed Party" to say "Guaranteed Parties" in two places within the redlined language shown. Modification #2 through Modification #7 in Schedule 1 may be adopted verbatim when using the Schedule 2 format.
In the final contract, the paragraph above Table A (on page 16) indicates that, for a bidder with an $80 million credit limit, the amount allocated to AmerenCILCO would be $15,600,000, but elsewhere in the contract and RFP documents, the AmerenCILCO amount is shown as $13,600,000. Which is the correct number?
If a bidder has an $80 million threshold, $13,600,000 would be allocated to AmerenCILCO.
Please clarify the new language in the definition of "Threshold", specifically the language regarding how a party's Threshold will be determined if a single guarantor is guarantying the obligations of multiple auction participants. For example, please clarify whether the 3rd paragraph of the definition of Threshold only applies to Affiliates who have a common guarantor or whether it applies to Affiliates generally, how the calculation set forth in paragraph 3 will work if a guarantor is providing a single guaranty to the three utilities, each granting a different threshold, for multiple affiliates, and what happens if the calculation set forth in paragraph 3 results in entities guaranteed by a single guarantor receiving credit lines that in the aggregate exceed the applicable threshold for such guarantor as set forth in Table A.
The language in the third paragraph of the definition of "Threshold" applies to affiliates in general. Multiple affiliates will need to split unsecured credit such that no more than a total of $80 million (across all Fixed Price Customer Supply Contracts with all three AIUs) will be granted to all of the affiliates in aggregate. For example, let's say Affiliate A would qualify for $60 million of unsecured credit because its guarantor is eligible to provide a parent guaranty for that amount, and Affiliate B would qualify for $40 million as a standalone. The unsecured credit for Affiliate A would be determined as follows (as indicated in the third paragraph of the definition of "Threshold"): IP unsecured credit = $60MM/($60MM + $40MM) x $40MM = $24MM; CIPS = $60MM/($60MM + $40MM) x $26.4MM = $15.84MM; CILCO = $60MM/($60MM + $40MM) x $13.6MM = $8.16MM. The guarantor for Affiliate A would provide a guaranty for the sum of these three amounts = $48.0MM. The unsecured credit for Affiliate B would be determined as follows: IP unsecured credit = $40MM/($60MM + $40MM) x $40MM = $16MM; CIPS = $40MM/($60MM + $40MM) x $26.4MM = $10.56MM; CILCO = $40MM/($60MM + $40MM) x $13.6MM = $5.44MM. The total unsecured credit for Affiliate B as a standalone would be $32.0MM. The total unsecured credit for Affiliates A and B combined would be $48.0MM + $32.0MM = $80.0MM. If a guarantor intends to provide a guaranty for more than one affiliate, the guarantor would need to provide a separate guaranty for each affiliate, and the sum of the guaranty amounts cannot exceed the amount for which the guarantor would qualify via Table A.
If an energy supplier was also awarded capacity in the 2010 procurement, is that supplier permitted to use a Letter of Credit with options shown in the energy contract but not the capacity contract?
Yes, a supplier using a Letter of Credit as collateral for both the 2010 capacity and energy contracts may use any or all of the options included in the energy contract, regardless of whether those options also appeared in the capacity contract.
How will a supplier's or Guarantor's credit limit be allocated among the agreements with the three Ameren Illinois Utilities?
The credit limit will be allocated 50% to AmerenIP, 33% to AmerenCIPS and 17% to AmerenCILCO.
If the Ameren Illinois Utilities, or their re-organized successor, falls below investment-grade ratings, what protections are place for supplier collateral?
Please see Section 8(g) of the ISDA Confirmation Letter, which describes the process for transferring collateral to a custodian if the Utilities become ineligible to hold collateral due to a Credit Rating Event.
What are the expected effects of the Ameren Illinois Utilities re-organization on the Utilities' credit ratings?
In a report dated March 15, 2010, Moody's indicated that the planned reorganization of Ameren's Illinois businesses will not affect the ratings or stable rating outlooks of Ameren's three Illinois utility subsidiaries.
Is a redline of the changes in the 2010 draft energy contract relative to the final 2009 energy contract available?
Yes, the redline is posted to the Energy page under the "Documents" section.
Which contracts are designated as Fixed Price Customer Supply Contracts, as defined in the ISDA Confirm Letter?
Fixed Price Customer Supply Contracts include all contracts with the Ameren Illinois Utilities that are designated as such in the contract. If a supplier has any existing contracts with the Ameren Illinois Utilities, whether the contract is a Fixed Price Customer Supply Contract can be determined based on whether the designation is included in the contract. The 2010 capacity contracts entered into following the April 5, 2010 procurement, and the capacity and energy swap contracts entered into following the 2009 procurements are all designated as Fixed Price Customer Supply Contracts.
If a potential bidder already has an ISDA in place with AMEREN or is in the process of negotiating an ISDA, does a potential bidder have to execute the ISDA Letter Agreement or can the existing ISDA be used? Alternatively, if a bidder was awarded energy blocks in the 2009 procurement, will they need to execute a new ISDA Confirmation Letter (including attachments 1 and 2)?
The structure of the Energy RFP contract is a long form confirmation; meaning that all transactions between a bidder and a utility will be placed into Table 1 and will be governed by this single document. The long form confirmation incorporates the 1992 ISDA Master Agreement and 1994 ISDA Credit Support Annex. This structure is different from a master agreement with different confirmations underneath it, but functionally works in the same way by having all transactions and legal documents act as a single agreement; the long form confirmation, though, is one document with only one signature block.
Bidders who are awarded energy contracts through the 2010 procurement process must execute independent ISDA long form confirmation letters in the form of the final Attachment A to the RFP, which will be issued on or before April 29, 2010, to cover the awards. The Transaction shall be subject to and governed by all the terms and conditions from the ISDA Master Agreement and Credit Support Annex that are included as Attachments 1 and 2 to the confirmation letter.
Can the $500 Bid Participation Fee be submitted by wire transfer?
No, Bid Participation Fees can only be submitted by check this year.
If a winning bidder who is unrated and does not maintain its own audited financial statements has named a guarantor in its Pre-Bid Qualification Application, must the bidder actually submit a guaranty after it executes its contract with Ameren, or may the winning bidder provide another form of performance assurance in lieu of a guaranty?
In lieu of a guaranty, bidders may post cash or a letter of credit (using the form specified in the contract) as collateral.
In other jurisdictions, RFP rules allow for an alternative form of guaranty process to establish credit support for standard offer/default service products. Can modifications to the form of Guaranty be proposed by interested bidders? If so, is Ameren willing to consider a potential bidder's proposed modifications to the guaranty, provide feedback on those proposed changes to the bidder, and then allow the bidder to adjust and resubmit a guaranty in response to Ameren's comments?
Bidders are invited to submit redlined comments to the posted draft form of guaranty. These changes will be reviewed as described in Section 4.1 of the RFP and acceptable changes will be incorporated into the final confirm (including the guaranty) that will be posted on or before April 29, 2010.
Can a supplier who has one or more existing guaranties currently in place with the Ameren Illinois Utilities use that same form of guaranty for credit support should it be successful in the Energy RFP? In the alternative, may a supplier amend one of its existing guaranties with Ameren to provide credit support for the Energy RFP?
If a winning supplier in the 2010 energy procurement chooses to use a guaranty for credit support, that guaranty must be in the format provided in the final confirm and schedules, which will be available on or before April 29, 2010. An existing guaranty can be amended as long as the amended version includes all modifications required to make it completely consistent with the guaranty format provided with the final confirm, along with any modifications as per the applicable schedules on the RFP website. Also, it should be noted that a guaranty for Fixed Price Customer Supply Contract (FPCSC) activity cannot also cover contracts that are not FPCSCs.
Is it necessary to provide separate Bid Participation Fees for the Energy RFP and the ComEd Standard Products RFP?
No, one $500 Bid Participation Fee covers participation in both the 2010 Energy and Standard Products RFPs.
In Table A (Page 16) of the Draft Confirmation letter, The Threshold / Credit Limit states that A- and above counterparties only have a credit limit of $40 million (of which CIPS is $26.4mm and CILCO is $13.6mm). Since IP is 50% of the total obligation (and not listed anywhere), should the Threshold / Credit Limit be set at $80 million?
The Draft Confirmation Letter provided as Attachment A to the Energy RFP is written with AmerenIP as the signatory, as shown on page 1 of the document. The $40 million credit limit shown for counterparties with a credit limit of A- or better is AmerenIP's 50% of the total $80 credit limit. In the contract with AmerenCIPS the credit limit would be $26.4 million and in the contract with AmerenCILCO the credit limit would be $3.6 million.
The RFP states the floating price will be calculated as the average MISO Day-Ahead LMP at teh AIU Load Zone. Can you confirm that 50% of this quantity will be AMIL.CIPS / 33% at AMIL.IP / 17% at AMIL.CILC?
The quantity percentages are 50% - AMIL.IP, 33% - AMIL.CIPS, and 17% - AMIL.CILCO. However all of these will now settle at the MISO CP Node AMIL.BGS9. Having all three utilities settle at one CP Node will help facilitate the future reorganization into one Ameren Illinois Company.
Ameren announced March 15 that it plans to reorganize its three Illinois electric and gas utilities - AmerenCIPS, AmerenCILCO and AmerenIP - into a single public utility that would do business as Ameren Illinois Company. As the first step in accomplishing this reorganization, Ameren and its subsidiaries filed an application with the Federal Energy Regulatory Commission and notices with the Illinois Commerce Commission, March 15. The Ameren Illinois utilities intend to complete the reorganization by Oct. 1, 2010.
Other questions can be found on the All Q&A page.
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