NOTICE DATE: September 7, 2023
NOTICE TYPE: M-A090723-01 Financial/Credit
SHORT DESCRIPTION: New Letter of Credit and Surety Bond Forms Available and Effective October 1, 2023
INTENDED AUDIENCE: ERCOT Counter-Parties
DAY AFFECTED: October 1, 2023
LONG DESCRIPTION: ERCOT Protocol Section 16.11.3(1)(b) requires that Counter-Parties submitting an irrevocable letter of credit naming ERCOT as the beneficiary must use the ERCOT Board-approved standard letter of credit form. Additionally, ERCOT Protocol Section 16.11.3(1)(c) requires that Counter-Parties submitting a surety bond naming ERCOT as the beneficiary must use the ERCOT Board-approved standard surety bond form.
On August 31, 2023, the ERCOT Board of Directors voted to approve changes to both the standard letter of credit form and the standard surety bond form. The revised forms are posted on ERCOT’s website (Credit) under the Financial Security Documents heading. Counter-Parties submitting letters of credit or surety bonds on or after October 1, 2023, must utilize the new forms. Counter-Parties that have existing letters of credit or surety bonds on file with ERCOT will be contacted starting October 1, 2023, with requests to replace those documents using the new forms.
ACTION REQUIRED: Counter-Parties should review the new letter of credit and surety bond forms, use the new forms going forward, and begin efforts to replace existing letters of credit and surety bonds using the new forms.
CONTACT: If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at [log in to unmask].
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