NOTICE DATE: January 15, 2025

NOTICE TYPE: M-B120224-02 Financial Credit

SHORT DESCRIPTION: Transitioning to the New LC and Surety Bond Templates

INTENDED AUDIENCE: All Market Participants 

DAYS AFFECTED: April 1, 2025  

LONG DESCRIPTION: According to paragraph (1)(a)(i) of Protocol Section 16.11.3, Alternative Means of Satisfying ERCOT Creditworthiness Requirements, "The letter of credit must be given using the ERCOT Board-approved standard letter of credit form". The new form for Letters of Credit was published on ERCOT website on September 1,2023: https://www.ercot.com/services/rq/credit

According to paragraph (1)(b)(i) of Protocol Section 16.11.3, Alternative Means of Satisfying ERCOT Creditworthiness Requirements, "The surety bond must be signed by a surety acceptable to ERCOT, in its sole discretion and must be in the form of ERCOT’s standard surety bond form approved by the ERCOT Board. No modifications to the form are permitted". The new form for Surety Bonds was published on ERCOT website on September 1,2023: https://www.ercot.com/services/rq/credit

While many Letters of Credit and Surety Bonds have already been replaced with the new forms, there remain some forms that have yet to be converted into the new form, so ERCOT is therefore giving a deadline by which form conversion must occur.

ACTION REQUIRED: All Market Participants must complete the conversion to the new Letter of Credit and/or Surety Bond forms by April 1, 2025. 

CONTACT:  If you have any questions, please contact your ERCOT Account Manager or reach out to ERCOT Credit at ERCOTCredit@ercot.com. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at ClientServices@ercot.com.

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