Section Puc 3003.03 - Financial Security Requirements of Competitive Natural Gas Suppliers(a) The financial security instrument required by Puc 3003.01(c)(1) or Puc 3003.02(a)(2) shall: (1) Be in the form of: a. An irrevocable standby letter of credit issued by a bank with assets of at least $1 billion and presentable at a U.S. office of such bank;b. A surety bond issued by an insurance company or bonding company included on the U.S. Treasury Department's list of certified companies and licensed in New Hampshire, with demand to be made on a U.S office of the named surety; orc. An unconditional guaranty of payment executed by the parent company or other affiliate of the CNGS, if the parent company or affiliate has and maintains an investment grade credit rating;(2) Be in an amount equal to the greater of:b. The estimated highest month's aggregated gas usage of all customers served by the CNGS in New Hampshire multiplied by the same month's Tennessee Gas Pipeline Zone 6 monthly index, for a CNGS's first year of operation; orc. The actual highest month's aggregated gas usage of all customers served by the CNGS in New Hampshire multiplied by the same month's Tennessee Gas Pipeline Zone 6 monthly index, for any year after the CNGS's first year of operation;(3) Not exceed $500,000.00, notwithstanding (2) above;(4) Name the commission as beneficiary, obligee, or guaranteed party, as applicable;(5) Have an effective term of not less than 12 months with a 6-month extended claims, draws, or demand period;(6) Have no right of cancellation during the initial effective term of the financial security instrument; and(7) Be adjusted annually, if based upon natural gas usage or estimated usage, under (2)b or (2)c above. The CNGS shall report its monthly and annual usage for the prior year ending March 31, as used to determine the amount of financial security, on or before May 31 of each year.(b) The commission shall make a claim under, or pursue an action against, financial security instruments for the following purposes and in the following order of payment priority: (1) Customer complaint reparations, ordered by the commission following notice and hearing and remaining unpaid by the CNGS after 30 days;(2) Costs incurred as necessary to ensure continuous service to a CNGS's customers through LDC sales service or another CNGS;(3) Fines or sanctions for violation of applicable laws or rules, assessed by the commission following notice and hearing and remaining unpaid by the CNGS after 30 days; and(4) Commission annual assessment remaining unpaid by the CNGS on June 1 of any calendar year, in the absence of exemption or good faith objection.(c) Each financial security instrument shall contain the following operative language: "The New Hampshire Public Utilities Commission may draw upon this financial security instrument if and when the Company has failed to make required payment(s) and/or payment arrangements in accordance with the terms and conditions of an order issued by the New Hampshire Public Utilities Commission."
(d) In the event the commission draws on a financial security instrument pursuant to Puc 3005 and Puc 3003.03(b) above, the CNGS shall replenish the financial security instrument to the full amount required by (a)(2) and (a)(3) above within the timeframe specified by the commission in any decision or order.(e) If the financial security instrument provided by a CNGS to the commission in connection with its original or any renewal registration will not be renewed or extended beyond its expiration date, the CNGS shall: (1) Provide written notice to the commission of such non-renewal or non-extension not less than 60 days prior to the expiration date; and(2) File with the executive director a replacement financial security instrument meeting the requirements of (a) above no less than 30 days prior to the expiration date.(f) A CNGS that fails to comply with the requirement to file a replacement financial security instrument under (e)(2) above shall be subject to fines, suspension, or revocation pursuant to Puc 3005.N.H. Admin. Code § Puc 3003.03
Amended by Volume XXXIX Number 16, Filed April 18, 2019, Proposed by #12757, Effective 6/1/2019, Expires 6/1/2029.