PECO Procurement For Default Supply

FAQs

Credit

FAQ-53:
What is the minimum required rating for a bank issuing a Pre-Bid Letter of Credit and Post-Bid Letter of Credit?

Under the terms of the Pre-Bid Letter of Credit, the issuing bank must certify that as of the Date of Issuance their senior unsecured debt is rated “A-“ or better by S&P Global Ratings, or “A3” or higher from Moody’s Investors Service. See paragraph 14 in Appendix 9 Standard Pre-Bid Letter of Credit posted to the Documents page of the RFP website.

Additionally, as stated in section 6.7 of the Uniform SMA, the Post-Bid Letter of Credit must be issued by a bank or other financial institution with a minimum “A-“ senior unsecured debt rating (or, if unavailable, corporate issuer rating discounted one notch) from S&P and “A3” from Moody’s.

08/05/2025 in Credit
FAQ-52:
If we win, are we required to post the collateral requirement before the Pre-Bid Letter of Credit is returned?

The Post-Bid Letter of Credit must be in place with PECO prior to the cancellation of the Pre-Bid Letter of Credit.

If the RFP Bidder has one or more Bids approved by the Commission, by close of the third business day following Commission approval of some or all of the lowest-priced Bids, each Default Supplier complies with all instructions from PECO to fulfill the creditworthiness requirements under the Uniform SMA. A Post-Bid Letter of Credit may be used to fulfil the creditworthiness requirements. PECO can collect on the Pre-Bid Letter of Credit if a winning RFP Bidder does not execute the Uniform SMA and all Transaction Confirmations, or if the winning RFP Bidder does not fulfill the creditworthiness requirements in the required timeframe.

08/05/2025 in Credit
FAQ-45:
Will the Independent Evaluator retain a Pre-Bid Letter of Credit between solicitations if requested by an RFP Bidder?

The Independent Evaluator will retain a Pre-Bid Letter of Credit between solicitations if requested by an RFP Bidder.

07/29/2025 in Credit
FAQ-43:
Can you please provide a physical address for PECO for the purposes of issuing the pre-bid letter of credit?

If a physical address is required strictly for purposes of identifying the Beneficiary, it is acceptable to use PECO’s address below the beneficiary name. Please see the acceptable modification to the header to include PECO’s address in the list of acceptable modifications to the Pre-Bid Letter of Credit posted on the Supplier Documents page. The pre-bid letter of credit must be submitted as an electronic PDF file via electronic means only to the Independent Evaluator. A hardcopy version should not be delivered to this address.

07/29/2025 in Credit
FAQ-42:
We do not have an RFP Guarantor that meets the creditworthiness requirements under the Uniform SMA. Does this mean that we cannot participate in the RFP?

An unrated entity or an entity with a credit rating below BBB- for S&P and/or Fitch or below Baa3 from Moody’s would not be granted any Unsecured Credit and cannot serve as an RFP Guarantor under the terms of the Uniform SMA (see Appendix A). It is not a requirement for an RFP Bidder to be rated or to rely on the financial standing of a Guarantor that meets the creditworthiness requirements in order to participate in the PECO RFP. In this case, the RFP Bidder would not be granted any Unsecured Credit and must post any required performance assurance collateral in the form of cash or a letter of credit.

07/29/2025 in Credit
FAQ-40:
Is it acceptable to rely on the financial standing of a Foreign Guarantor?

Yes, RFP Bidders may rely on the financial standing of a Foreign Guarantor. Please see Paragraphs IV.5. and V.5. of the RFP Rules for additional requirements applicable to RFP Bidders with Foreign Guarantors. The RFP Rules are available on the Supplier Documents page of the RFP website.

07/29/2025 in Credit
FAQ-9:
Is there a credit-based tranche cap in the PECO RFP?

No, there is no cap on the number of tranches for which an RFP Bidder can bid on based on the credit assessment for the entity on which that RFP Bidder is relying. There are, however, load caps for the Residential and Small Commercial Classes that are set so that the Default Service customers of these Classes have no more than a 50% exposure to any one Default Supplier at any given time. There is a load cap for the Consolidated Large Commercial and Industrial Class that is set so that the Default Service customers of that Class have no more than a 75% exposure to any one Default Supplier at any given time.

07/29/2025 in Credit