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Utility With High Migration Choice Program Proposes Higher Supplier Creditworthiness Standards
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Dominion East Ohio has filed an intent to file a new distribution rate case in Ohio, with its pre-filing notice including various proposed tariff changes
Notably, Dominion East Ohio seeks to change certain provisions under the General Terms and Conditions of Energy Choice Pooling Service
Currently, based on the General Terms and Conditions of Energy Choice Pooling Service posted on DEO's website (with the relevant pages dated effective December 2, 2021), a Supplier may satisfy its initial creditworthiness requirement by demonstrating
that it has and maintains investment grade long-term bond ratings from any two of
the following rating agencies:
Dominion East Ohio would revise the minimum credit rating acceptable to be used to satisfy a supplier's initial creditworthiness requirement to be as follows:
Dominion East Ohio also proposes to modify language concerning a supplier engaged in a bankruptcy proceeding, specifically removing an exemption, from the cessation of service by DEO to the supplier, for a supplier who is a debtor in possession operating under Chapter XI of the Federal Bankruptcy Act
Currently, the General Terms and Conditions of Energy Choice Pooling Service posted on DEO's website (with the relevant pages dated effective: June 6, 2013) provide that: "Supplier shall not be operating under any chapter of the bankruptcy laws and shall
not be subject to liquidation or debt reduction procedures under state laws such as
an assignment for the benefit of creditors, or any informal creditors' committee
agreement. An exception can be made for a Supplier who is a debtor in
possession operating under Chapter XI of the Federal Bankruptcy Act, but only
with adequate assurances that East Ohio's billing under the Agreement will be
paid promptly as a cost of administration under the federal court's jurisdiction.
Under the tariff filed with the pre-filing notice, this provision has been modified remove the debtor in
possession language, and to instead state in full: "Supplier shall not be operating under or the subject of any proceeding under Title
11 of the United States Code (the 'Bankruptcy Code') or any other proceeding for
the adjustment of Supplier’s debts, including an assignment for the benefit of
creditors, any receivership, or entity dissolution."
As in the current terms, the revised terms do provide that, "East Ohio shall make reasonable alternative credit arrangements with a Supplier
that is unable to meet the aforementioned criteria and with those Suppliers whose
credit requirements exceed their allowed unsecured credit limit, if any. East Ohio
shall determine the amount and type of additional financial instruments, if any,
needed to support a Supplier’s participation in the Program."
Cas 23-0897-GA-ATA et al.
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September 29, 2023
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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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