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.

FAQs Disclaimer

FAQs Disclaimer

The information presented and distributed in the Frequently Asked Questions (FAQs) may be subject to modifications and/or amendments and is provided for informational purposes only. The information provided in the CBP, or on the CBP Information Website, has been prepared to assist bidders in evaluating the CBP. It does not purport to contain all the information that may be relevant to a bidder in satisfying its due diligence efforts. Neither Duke Energy Ohio, Inc. nor the Auction Manager make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information, and shall not, either individually or as a corporation, be liable for any representation expressed or implied in the CBP or any omissions from the CBP, or any information provided to a bidder by any other source. A bidder should check the CBP Information Website frequently to ensure it has the latest documentation and information. Neither Duke Energy Ohio, Inc., nor the Auction Manager, nor any of their representatives, shall be liable to a bidder or any of its representatives for any consequences relating to or arising from the bidder’s use of outdated information. The information is not intended to form any part of the basis of any investment decision, valuation or any bid that may be submitted during the CBP process. Each recipient should not rely solely on this information and should make its own independent assessment of the potential value to supply the Duke Energy Ohio, Inc.’s load after making all investigations it deems necessary.

Copyright © 2023 CRA International, Inc.   |   Forward-Looking Statements  |  Privacy Statement  |  Terms Of Use