Posting Language
Title
Approve an ordinance authorizing the issuance of short-term obligations through a private placement in a maximum amount of $100,005,000 at any one time outstanding; authorizing obtaining a related letter of credit to support Austin Energy's activities in the ERCOT market; approving the execution of all related agreements, including a Note Purchase Agreement for any related credit facilities; and approving payment of all related costs of issuance.
De
Lead Department
Financial Services Department.
Fiscal Note
This item has no fiscal impact.
For More Information:
Belinda Weaver, Treasurer, 512-974-7885.
Additional Backup Information:
Austin Energy is a participant in the Electric Reliability Council of Texas, Inc. ("ERCOT") wholesale markets, including the real time market, the day ahead market, and the congestion revenue rights market. As a participant, Austin Energy is subject to the provisions of the Nodal Protocols established by ERCOT and is required to provide financial security pursuant to the terms of the Nodal Protocols in a form acceptable to ERCOT. If a market participant such as Austin Energy fails to provide financial security, it could be required to post cash collateral or face being excluded from some of the ERCOT markets. Continuous posting of cash as collateral could impact Austin Energy's operational reserves. ERCOT previously provided certain of its market participants with unsecured credit limits but is ending this practice on October 1, which is requiring Austin Energy and certain other utilities to meet its ERCOT financial security requirements through an external source such as a letter of credit or surety policy with a bank.
An unconditional, irrevocable letter of credit issued by a bank to ERCOT is one form of acceptable financial security under the Nodal Protocols. Therefore, Austin Energy seeks an Irrevocable and Unconditional Standby Letter of Credit to assist with its obligation to provide financial securit...
Click here for full text