Posting Language
Title
Approve an ordinance authorizing the issuance of short-term obligations through a private placement in a maximum of $100,005,000 at any one time outstanding, authorizing the replacement of an existing letter of credit to support Austin Energy's activities in the Electric Reliability Council of Texas 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.
Body
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 - this includes either posting cash or providing a letter of credit or a surety policy with a bank. If a market participant such as Austin Energy fails to provide financial security, it could face potential exclusion from some of the ERCOT markets. Continuous posting of cash as collateral is impractical since it could impact Austin Energy's operational reserves. Since 2023, when ERCOT stopped providing market participants with unsecured credit limits, Austin Energy has provided a letter of credit for the benefit of ERCOT to satisfy its financial security requirements. On September 14, 2023, City Council passed and approved Ordinance No. 20230914-018, authorizing the issuance of City of Austin, Texas Utility System Program Notes, Taxable Series, which were issued to Wells Fargo Bank, National Association. The current LOC expires on September 28, 2025....
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