CRE 00001
Published On: 11/21/2011

Question: Is an enforceability opinion required for a parent guaranty? If yes, is in-house counsel acceptable?

Answer: Yes to both questions.

CRE 00002
Published On: 12/02/2011

Question: SSO Suppliers have one day to meet margin calls with cash and an additional day to respond with Letters of Credit (depending on notification time). There does not appear to be a cure period for posting collateral. Is this understanding correct? Do Suppliers have the ability to work around potential operational delays?

Answer: The referenced requirement applies to calls received prior to 1:00 p.m., prevailing Eastern Time. For calls received after 1:00 p.m., prevailing Eastern Time, an additional day is provided. Section 5.7 of the Master SSO Supply Agreement states further that the period to provide collateral may be extended (in writing) by Duke Energy Ohio, Inc. and that the period for return of collateral may be extended (in writing) by the SSO supplier, and, in each case, a one-day extension will not be unreasonably denied.

CRE 00003
Published On: 03/13/2012

Question: Our company would like to use a BBB- rated parent company to provide security. What are the options for the use of a Parental Guaranty for the pre-bid security or other collateral requirements? Can you please point me to a description of the credit requirements and options?

Answer: Applicants can have a third party act as a guarantor.  In this case, if they want to use a BBB- S&P rated company as their parental guarantor, they need to fill out Section 1.8 "Guarantor Information" to indicate that they are using a guarantor during the Part 1 Application process.  During the Part 2 Application process, they can provide a "Letter of Intent to Provide a Guaranty" from the guarantor to satisfy the need for additional Pre-Bid Security.

CRE 00004
Published On: 05/01/2012

Question: Can an SSO Supplier (winning bidder in the auction) who initially submits an SSO Supplier Letter of Credit to satisfy the creditworthiness requirements of the Master SSO Supply Agreement, later replace the SSO Supplier Letter of Credit with acceptable guarantees from a creditworthy Guarantor?

Answer: Provided a supplier meets all applicable requirements, they can subsequently replace a letter of credit with a guarantee. 

CRE 00005
Published On: 01/14/2022

Question: In the event of a new award in the upcoming solicitation, will current suppliers be allowed to amend existing parental guaranties to satisfy applicable credit requirements?

Answer: Yes, Duke Energy Ohio will allow current suppliers to amend existing parental guaranties to satisfy applicable credit requirements with a couple of caveats.

Please check that your current parental Guaranty includes the following bolded language in paragraph 2: “WHEREAS, Duke Energy Ohio has entered into or will be entering into one or more Master Standard Service Offer Supply Agreements (each individually and collectively, the “Agreement”).” If the current Guaranty does not include this language, your amendment to the existing Guaranty must incorporate this update.

Please also note, the Master SSO Agreement’s Section 5.6(f) enforces the credit limit to apply to both ICT guaranty and TEA guaranty.