PUBLIC
WP35-CM Applicant /Capacity
Provider Credit Cover Process
EMRS Working Practice
EMR Settlement Limited
Version 5.0
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
CONTENTS
Change Amendment Record 3
1. Introduction 4
1.1 Scope and Purpose of the Working Practice 4
1.2 Main Users of this Working Practice and Responsibilities 4
1.3 Associated Documents 5
2. Credit Cover 5
2.1 Release of Credit Cover 6
2.2 Capacity Market Registration Form and EMR Settlement Authorisations 6
3. Interface and Timetable Information 7
3.1 Applicant Lodge Credit Cover – Cash 7
3.2 Applicant Lodge Credit Cover Letter of Credit 11
3.3 Reduction of Applicant Credit Cover – Cash 15
3.4 Reduction of Applicant Credit Cover Letter of Credit 18
3.2 Release of Applicant or Capacity Provider Credit Cover – Cash 21 3.6 Release of Applicant or Capacity Provider Credit Cover – Letter of Credit 24
4. Contact information 27
5. Acronyms and Definitions 27
6. Appendix 1 - Approved Form of Letter of Credit 28
7. Appendix 2 - Form of Demand 30
8. Appendix 3 - Notice of Approved Credit Cover 31
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
Change Amendment Record
Version
Date
Description of Changes
Changes
Included
Consultation
Refs
1.0 1 Sep 14 Go-live Version n/a n/a
2.0 12 Sept 14 Updated to include Letter of Credit and revised Bank Account Details
n/a n/a
3.0 2 Oct 15 Updated to include revised Bank Account Name, IBAN and BIC/SWIFT code
n/a n/a
4.0 8 May 15 Updated to include WP number, version numbers corrected and contact telephone updated
n/a n/a
5.0 17 Aug 15 Updated for Capacity Market 2015
N/A N/A
©EMR Settlement Limited 2015
Disclaimer: Please note that whilst this document has been prepared with due care, EMR Settlement Limited does not make any representation, warranty or undertaking, express or implied, in relation to the completeness and or accuracy of information contained in this document, and accordingly EMR Settlement Limited shall not be liable for any damages resulting from the use of this
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
1.
Introduction
In order to enter the Capacity Market Auction, some Applicants will need to lodge Credit Cover with the Settlement Body (Electricity Settlement Company (ESC)) as part of the prequalification process. This document covers the process to lodge Credit Cover and also the release of Credit Cover.
1.1 Scope and Purpose of the Working Practice
The purpose of this working practice is to provide Applicants with information on how to lodge Credit Cover with EMR Settlement (EMRS) on behalf of ESC.
On Prequalification Results Day, those Applicants that receive a notice from the Delivery Body that states prequalification of their Capacity Market Unit(s) (CMU(s)) is conditional on providing Credit Cover. The Applicant must lodge Credit Cover with EMRS.
This working practice also details, when the Capacity Market Register is updated to reflect a reduced Credit Cover requirement or no Credit Cover is required, the Applicant or Capacity Provider can make a request to EMRS for the release of Credit Cover.
1.2 Main Users of this Working Practice and Responsibilities
This document is intended to be used by Applicants and Capacity Providers. Table 2 summarises the roles and responsibilities of those parties involved in this procedure, with respect to this procedure only.
Table 2: Roles and Responsibilities for Applicants and Capacity Providers for the Applicant Credit Cover process
Role
Responsibilities
Applicant1 Submits Credit Cover to ESC. Makes a request for the partial release
or release of its Credit Cover held with ESC.
Capacity Provider2 Makes a request for the partial release or release of its Credit Cover
held with ESC.
Delivery Body Provides Applicants with a prequalification notice following
Prequalification Results Day. Updates the Capacity Market Register with updated Credit Cover positions.
Electricity Settlements Company Ltd (ESC)
Approves the release or partial release of Credit Cover back to the Applicant or Capacity Provider.
EMR Settlement Limited (Settlement Agent)
Validates the receipt of Credit Cover from Applicants. Seeks approval from the ESC to release or partial release Credit Cover to the
Applicant or Capacity Provider.
1 An Applicant for the purpose of this procedure is a person has submitted an application for prequalification to bid in a
Capacity Auction in respect of a CMU and obtained a conditional prequalification notice.
2 Capacity Provider holds a Capacity Agreement as defined in Regulation 30(1) of the Electricity Capacity Regulations
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
1.3 Associated Documents
This working practice should be read in conjunction with the following documents:
Document
3Electricity Capacity Regulations 2014
Capacity Market Rules 20144
Capacity Market (Amendment) (No.1) Rules 2014 Capacity Market (Amendment) (No.2) Rules 2014
Capacity Market (Amendment) Rules 2015
Capacity Market Operational Plan 20155
WP22 – Applicant/Capacity Provider Registration6
EMR Settlement Authorisations7
2.
Credit Cover
Credit Cover can be lodged in the form of cash or Letter of Credit for each applicable CMU. If lodging cash, the specified bank account is detailed within Section 3.1 and the approved Letter of Credit template is located in Appendix 5 and 6 of this document.
The amount of Credit Cover required is equal to the CMU de-rated capacity in Megawatt (MW) multiplied:
●
by £5,000/MW for CMU’s for the T-4 auction●
by £500/MW for CMU’s for the DSR transitional auction8The notice of conditional prequalification issued by the Delivery Body will state the de-rated capacity for each CMU and the applicable auction.
Within 15 working days of lodging Credit Cover the Applicant will receive per CMU a ‘Notice of Approved Credit Cover’ or a ‘Notice of Unapproved Credit Cover’ from the EMRS on behalf of the ESC. The
Applicant must provide the Notice of Approved Credit Cover to the Delivery Body or resubmit Credit Cover to be approved.
3Regulations can be found at http://www.legislation.gov.uk/
4 Capacity Market Rules can be found at https://www.gov.uk/government/publications/capacity-market-rules 5 Capacity Market Operational Plan is published by the Delivery Body and can be found at
https://www.emrdeliverybody.com/CM/T-4-Auction-2015.aspx
6 WP22 – Applicant/Capacity Provider Registration can be found at
https://emrsettlement.co.uk/publications/working-practices/
7 EMR Settlement Authorisations guidance can be found at https://emrsettlement.co.uk/publications/guidance/ 8 Regulation 29 details the DSR Transitional Auction in the Capacity Market Regulations 2014
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
2.1 Release of Credit Cover
Once the release of Credit Cover has been approved by the ESC this will be released into the bank account specified or the address the Letter of Credit is to be returned specified on the Capacity Market Registration Form.
2.2 Capacity Market Registration Form and EMR Settlement Authorisations
An Applicant submitting Credit Cover will need to complete the Capacity Market Registration Form at the same time. This process is detailed in the WP22 –Applicant/Capacity Provider Registration.9
The Capacity Market Registration Form confirms your Company’s Primary Email Address, which will be used to communicate your Approval or Unapproved Credit Cover Notice. Also, establishes your EMR Settlement Authorisations and more information on this can be located within the EMR Settlement Authorisations guidance document.10
9 WP22 – Applicant/Capacity Provider Registration can be found at
https://emrsettlement.co.uk/publications/working-practices/
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.
Interface and Timetable Information
3.1 Applicant Lodge Credit Cover – Cash
This details the process when the Applicant lodges Credit Cover in the form of cash.
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.1.1 Regulation 59(3) Rule 4.6.1 Applicants are required to provide Credit Cover within 5 WDs after receiving the conditional prequalification notice11
Lodge Credit Cover in cash
Applicant Bank
Account12 Account Details Bank: Natwest
Account Name: GBS Re ESC Bid Bond Collateral Acc. No.: 10018379 Sort Code: 60-70-80 IBAN: GB72NWBK60708010018379 BIC/SWIFT: NWBKGB2L Electronic Bank Transfer 3.1.2 Following WD from 3.1.1 Monitor Bank Account for new Credit Cover
EMRS Internal
Process
11 On the fifth working day after Prequalification Results Day the credit cover must to be received before 17.00 hours into the Bank Account. 12 A specified bank account by the ESC as defined within the Regulations 54(4).
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.1.3 Regulation 55(3)(b) No later than 15 WDs after Credit Cover is received Validate received Credit Cover
EMRS Validate received Credit Cover Capacity Market Register
Credit Cover Amount received in accordance with Regulation 59 Cash is in accordance with Regulation 54(2)(b) Internal Process 3.1.4 Regulation 55
Following 3.1.3 Credit Cover approved, send Notice of Approved Credit Cover
EMRS Applicant ESC
Notice of Approved Credit Cover Email
3.1.5 Rule 4.6.2 Following 3.1.4, within 5 WDs or no later than 32 WDs from Prequalification Results Day Send Notice of Approved Credit Cover END PROCESS Applicant Delivery Body Email or Portal 3.1.6 Regulation 55
Following 3.1.3 Credit Cover not approved, send Notice of Unapproved Credit Cover EMRS Applicant ESC
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.1.7 Regulation 56(2)
Following 3.1.6 and within 5 WDs, but no later than last day to re-submit Credit Cover13. Submit additional Credit Cover Applicant Bank Account Account Details Bank: Natwest
Account Name: GBS Re ESC Bid Bond Collateral Acc. No.: 10018379 Sort Code: 60-70-80 IBAN: GB72NWBK60708010018379 BIC/SWIFT: NWBKGB2L Electronic Bank Transfer 3.1.8 Regulation 55 Regulation 55(3)(a) Within 2 WDs of receiving additional Credit Cover (3.1.7) and no later than last day to approve resubmitted Credit Cover14. Validate additional received Credit Cover
EMRS Validate received Credit Cover Capacity Market Register
Credit Cover Amount received in accordance with Regulation 59 Cash is in accordance with Regulation 54(2)(b)
Internal Process
13 For the purpose of this version of the Working Practice the last day to re-submit applicant credit cover is Friday 6 November 2015. 14 For the purpose of this version of the Working Practice the last day to approve resubmitted Credit Cover is Tuesday 10 November 2015.
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.1.9 Regulation 55
Following 3.1.8 Credit Cover is approved, send Notice of Approved Credit Cover
Credit Cover is not approved, send Notice of
Unapproved Credit Cover and follow from step 3.1.7
EMRS Applicant ESC
Notice of Approved Credit Cover
Notice of Unapproved Credit Cover
Email 3.1.10 Rule 4.6.2 Within 5 WDs or no later than 32 WDs from Prequalification Results Day Send Notice of Approved Credit Cover END PROCESS Applicant Delivery Body Email or Portal
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.2 Applicant Lodge Credit Cover Letter of Credit15
This details the process when the Applicant lodges Credit Cover in the form of a Letter of Credit
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.2.1 Regulation 59(3) Rule 4.6.1 Applicants are required to provide Credit Cover within 5 WDs after receiving the conditional prequalification notice16
Lodge Letter of Credit Applicant EMRS Specified Address
EMR Settlement Limited, 4th Floor, 350 Euston Road, London, NW1 3AW Post17 3.2.2 Following WD from 3.2.1
Monitor post for Letter of Credit EMRS Internal Process 3.2.3 Regulation 55(3)(b) No later than 15 WDs after Credit Cover is received
Validate received Credit Cover
EMRS Validate received Credit Cover
Capacity Market Register
Credit Cover Amount received in accordance with Regulation 59 LoC is in accordance with
Internal Process
15The approved form of the Letter of Credit by the Settlement Body (Electricity Settlements Company) is located in Appendix 5.
16On the fifth working day after Prequalification Results Days the Letter of Credit must to be received before 17.00 hours at the specified address.
17 To ensure safe and secure receipt of Letters of Credit please use secure courier service that provides a tracking facility.
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Regulation 54(3)3.2.4 Regulation 55
Following 3.2.3 Credit Cover approved, send Notice of Approved Credit Cover
EMRS Applicant ESC
Notice of Approved Credit Cover Email
3.2.5 Rule 4.6.2 Following 3.2.4, within 5 WDs or no later than 32 WDs from Pre-qualification Results Day
Send Notice of Approved Credit Cover END PROCESS Applicant Delivery Body Email or Portal 3.2.6 Regulation 55
Following 3.2.3 Credit Cover not
approved, send Notice of Unapproved Credit Cover
EMRS Applicant ESC
Notice of Unapproved Credit Cover Email
3.2.7 Regulation 56(2)
Following 3.2.6, and within 5 WDs, but no later than last day to re-submit Credit Cover18.
Additional Credit Cover Applicant EMRS Specified Address
EMR Settlement Limited, 4th Floor, 350 Euston Road, London, NW1 3AW Post19
18 For the purpose of this version of the Working Practice the last day to re-submit applicant credit cover is Friday 6 November 2015..
19 To ensure safe and secure receipt of Letters of Credit please use secure courier service that provides a tracking facility. Please send an email confirming the despatch of the
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.2.8 Regulation 55 Regulation 55(3)(a) Following 3.2.7, and within 2 WDs of receiving additional Credit Cover (3.2.6) and no later than last day to approve resubmitted Credit Cover20.Validate additional received Credit Cover
EMRS Validate received Credit Cover Capacity Market Register
Credit Cover Amount received in accordance with Regulation 59 LoC is in accordance with regulation 54 (3)
Internal Process
3.2.9 Regulation 55
Following 3.2.8 Credit Cover is approved, send Notice of Approved Credit Cover
Credit Cover is not approved, send Notice of Unapproved Credit Cover and follow from step 3.2.7
EMRS Applicant
ESC
Notice of Approved Credit Cover
Notice of Unapproved Credit Cover
Email 3.2.10 Rule 4.6.2 Following 3.2.9, and within 5 WDs or no later than 32 WDs from
Pre-Send Notice of Approved Credit Cover END PROCESS Applicant Delivery Body Email or Portal
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
qualificationWP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.3 Reduction of Applicant Credit Cover – Cash
Applicant’s that own unproven DSR CMUs may elect a lower bid capacity than de-rating factor as per Rule 5.5.11. This means a reduction of the Credit Cover and Applicants may request the release of the excess Credit Cover.
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.3.1 Rule 5.5.11 Prior to the start of the Capacity Market Auction
Applicant elect lower bid capacity than their de-rating factor21
Delivery Body
Capacity Market Register
3.3.2 Rule 5.5.13 Regulation 58(2) Following 3.3.1, when the Capacity Market Register is updated
Request the release of excess Credit Cover
Applicant22 EMRS contact@emrsettlement.co.uk Email
3.3.3 Following 3.3.2 Acknowledge receipt of request from Applicant
EMRS Applicant Email
3.3.4 Within 5 WDs
of 3.3.2
Validate request to release excess Credit Cover
EMRS Validate request:
EMR Settlement Authorisations Capacity Market Register
Credit Cover amount
Internal Process
21 Unproven DSR elected lower bid capacity than de-rating factor.
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.3.5 Following 3.3.3 Where successfully
validated seek approval to release excess Credit Cover
EMRS ESC Request from Applicant Capacity Market Register
3.3.6 Following 3.3.3 Where not successfully validated send notification (start from 3.3.2)
EMRS Applicant Request from Applicant Capacity Market Register
3.3.7 Within 5 WDs
of 3.3.5
Approve the release of excess Credit Cover and confirm if the release of excess Credit Cover is approve or unapproved ESC EMRS Internal Process Email
3.3.8 Following 3.3.7 Send notification that request is approved
EMRS Applicant Email
3.3.9 Regulation 58(3)
Same WD as 3.3.7
Release excess Cash Credit Cover
END PROCESS
EMRS ESC
Applicant
Cash is returned to bank account specified on the Capacity Market Registration Form
Bank transfer
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.3.10 Following 3.3.7 Where request is unapproved send notification to Applicant (start from 3.3.2)
END PROCESS
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.4 Reduction of Applicant Credit Cover Letter of Credit23
Applicant’s that own unproven DSR CMUs may elect a lower bid capacity than de-rating factor as per Rule 5.5.11. This means a reduction of the Credit Cover and Applicants may request the release of the excess Credit Cover.
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.4.1 Rule 5.5.11 Prior to the start of the Capacity Market Auction
Applicant elect a lower bidding capacity than their de-rated capacity24
Delivery Body
Update the Capacity Market Register
3.4.2 Rule 5.5.13 Regulation 58 (2) Following 3.4.1, when the Capacity Market Register is updated
Request the release of excess Credit Cover
Applicant25 EMRS contact@emrsettlement.co.uk Email and
Post26 3.4.3 Following 3.4.2 Acknowledge receipt of request from Applicant
EMRS Applicant Email
23 The approved form of the Letter of Credit by the Settlement Body (Electricity Settlements Company) is located in Appendix 5. 24 Unproven DSR elected lower bid capacity than de-rating factor.
25 The request needs to be made by the Authorised contact as specified on the Capacity Market Registration Form.
26 To ensure safe and secure receipt of Letters of Credit please use secure courier service that provides a tracking facility. Please send an email confirming the despatch
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.4.4 Within 5 WDs
of 3.4.2
Validate request to release excess Credit Cover
EMRS Validate request:
EMR Settlement Authorisations Capacity Market Register
Credit Cover amount
Internal Process 3.4.5 Following 3.4.4 Where successfully validated seek approval to release excess Credit Cover
EMRS ESC Request from Applicant
Capacity Market Register
Email 3.4.6 Following 3.4.4 Where not successfully validated send notification (start from step 3.4.2)
EMRS Applicant Request from Applicant Capacity Market Register
3.4.7 Within 5 WDs
of 3.4.5
Approve the release of excess Credit Cover and confirm if the release of excess Credit Cover is approve or unapproved ESC EMRS Internal Process Email 3.4.8 Following 3.4.7
Send notification that request is approved
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.4.9 Regulation 58(3)
Following 3.4.8
Release excess Credit Cover - Letter of Credit27
END PROCESS
EMRS ESC
Applicant
Letter of Credit is returned back to the address specified on the Applicant/Capacity Provider Registration Form Email Post 3.4.10 Following 3.4.7 Where request is unapproved send notification to
Applicant (start from 3.4.2)
END PROCESS
EMRS Applicant Email
27 Release of partial Letter of Credit requires either an Amendment to the original Letter of Credit or new Letter of Credit submitted and approved before the original could be
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.2 Release of Applicant or Capacity Provider Credit Cover – Cash
Credit Cover will only be released if the Applicant has provided their contact and bank account details.
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required Method
3.5.1 Rule 14.4.3 Following the results from the Capacity Auction or notice of an event entitling the Applicant or Capacity Provider to the release of Credit Cover Capacity Market Register updated
Delivery Body Capacity Market Register
3.5.2 Regulation 58(2) Following 3.5.1, when the Capacity Market Register is updated
Request the release of any Credit Cover
Applicant/Capacity
Provider28 EMRS contact@emrsettlement.co.uk Email
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required Method
3.5.3 Following 3.5.2 Acknowledge receipt of request EMRS Applicant/ Capacity Provider Email 3.5.4 Within 5 WDs of 3.5.2 Validate request to release Credit Cover
EMRS Validate request:
EMR Settlement Authorisations Capacity Market Register
Credit Cover amount
Internal Process 3.3.5 Following 3.5.4 Where successfully validated seek approval to release Credit Cover
EMRS ESC Request from Applicant
Capacity Market Register
3.5.6 Following
3.5.4
Where not successfully validated send
notification (start from 3.5.2)
EMRS Applicant/
Capacity Provider
Request from Applicant Capacity Market Register
3.5.7 Within 5 WDs
of 3.5.5
Approve the release of Credit Cover and confirm if the release of Credit Cover is approve or unapproved ESC EMRS Internal Process Email
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required Method
3.5.8 Following
3.5.7
Send notification that request is approved EMRS Applicant/ Capacity Provider Email 3.5.9 Regulation 58(3) Following 3.5.8
Release Cash Credit Cover END PROCESS EMRS ESC Applicant/ Capacity Provider
Cash is returned to bank account specified on the Capacity Market Registration Form Bank transfer 3.5.10 Following 3.5.7 Where request is unapproved send notification to Applicant (start from step 3.5.2)
END PROCESS
EMRS Applicant/
Capacity Provider
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
3.6 Release of Applicant or Capacity Provider Credit Cover – Letter of Credit
Credit Cover will be released if the Applicant has provided their contact and address details.
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.6.1 Rule 14.4.3 Following the results from the Capacity Auction or notice of an event entitling the Applicant or Capacity Provider to the release of Credit Cover Capacity Market Register updated Delivery Body
Capacity Market Register
3.6.2 Regulation 58 (2) Following 3.6.1, when the Capacity Market Register is updated
Request the release of Credit Cover
Applicant/ Capacity Provider29
EMRS contact@emrsettlement.co.uk Email and Post30
29 The request needs to be made by the Authorised contact as specified on the Capacity Market Registration Form.
30 To ensure safe and secure receipt of Letters of Credit please use secure courier service that provides a tracking facility. Please send an email confirming the despatch
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.6.3 Following 3.6.2 Acknowledge receipt of request EMRS Applicant/ Capacity Provider Email 3.6.4 Within 5 WDs of 3.6.2 Validate request to release Credit Cover
EMRS Validate request:
EMR Settlement Authorisations Capacity Market Register
Credit Cover amount
Internal Process 3.6.5 Following 3.6.4 Where successfully validated seek approval to release Credit Cover
EMRS ESC Request from Applicant Capacity Market Register
Email 3.6.6 Following 3.6.4 Where not successfully validated send notification (start from step 3.4.2)
EMRS Applicant/
Capacity Provider
Request from Applicant Capacity Market Register
3.6.7 Within 5 WDs
of 3.6.5
Approve the release of Credit Cover and confirm if the release of Credit Cover is approve or unapproved ESC EMRS Internal Process Email
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT COVER PROCESS
Ref
Rule or
Regulation
When
Action
From
To
Input Information Required
Method
3.6.8 Following
3.6.7
Send notification that request is approved EMRS Applicant/ Capacity Provider Email 3.6.9 Regulation 58(3) Following 3.6.8
Release Credit Cover - Letter of Credit31 END PROCESS EMRS ESC Applicant/ Capacity Provider
Letter of Credit is returned back to the address specified on the
Capacity Market Registration Form32
Email Post 3.6.10 Following 3.6.7 Where request is unapproved send notification to
Applicant (start from 3.6.2) END PROCESS EMRS Applicant/ Capacity Provider Email
31Release of partial Letter of Credit requires either an Amendment to the original Letter of Credit or a new Letter of Credit submitted and approved before the original could
be returned. This will follow the process detailed in the Lodge Applicant Credit Cover – Letter of Credit in 3.2.
32 Letter of Credit will be released via secure courier with tracking. An e-mail confirming that the Letter of Credit has been couriered including the tracking information will also
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
4.
Contact information
For queries regarding either Credit Cover or the process contained in this document please contact:
Contact Organisation
Contact
EMR Settlement Limited (Settlement Agent)
Telephone: 020 7380 4333
Email: contact@emrsettlement.co.uk
5.
Acronyms and Definitions
A full list of acronyms and definitions included within this document can be found on the EMRS website.33
33The acronyms and definitions document can be found in the useful links section on the publication pages on the
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
6.
Appendix 1 - Approved Form of Letter of Credit
To: Electricity Settlements Company Limited[DATE]
Dear Sirs,
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: [NUMBER]
1. By this letter we, [insert name of issuer],34 establish our irrevocable standby letter of credit (“letter of credit”) number [number] in your favour at the request of [name of relevant
applicant/capacity provider]35 (the “Principal”) of [address of relevant applicant/capacity
provider] for the maximum aggregate pounds sterling36 amount of [£amount] (the “Maximum
Amount”).
2. This letter of credit is established in connection with the Principal’s obligations to provide credit cover under the Electricity Capacity Regulations 2014 (as amended or modified from time to time) (the “Capacity Regulations”).
3. We unconditionally and irrevocably undertake to pay you, in Pounds Sterling to the bank account set out in your written demand for payment, the amount you claim on the date we receive your duly completed written demand at [insert details of the issuing bank, department name and/or
officer and address – Note: insert at least one precise location as close as possible to Fleetbank House, 2-6 Salisbury Square, EC4Y 8JX] or at any of our other London branches subject to the
following conditions:
●
your demand must be received by us by [time] p.m. (London time) on the Expiry Date (as defined in paragraph 4); and●
your demand must be substantially in the form attached to this letter of credit signed by you stating that you are entitled under the Capacity Regulations to draw down credit cover provided by the Principal under the Capacity Regulations and the amount claimed which, in aggregate with any other claims made under this letter of credit, must not exceed theMaximum Amount.
34Regulation 54 of the Capacity Regulations requires the Issuer of the letter of credit to be:
a. a United Kingdom clearing bank,
b. any other bank which has a long term debt rating of –
o not less than A3 by Moody’s Investors Service, Inc. (incorporated in the US State of Delaware with file number 0577904); or
o not less than A- by Standard & Poor’s Corporation (incorporated in the US State of Delaware with file number 4621989), or
c. Such other bank as the Settlement Body may approve.
35 The Principal must be the person who is required to provide the credit cover under the Capacity Regulations. The
name of the Principal needs to match the name of the applicant/capacity provider as held in the records of ESC.
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
4. This letter of credit shall expire at [time] p.m. (London time) on [date] (“Expiry Date”), after which we shall have no further liability to you, except in relation to any demand validly
presented before expiry of this letter of credit that remains unpaid.
5. A demand may be made for less than the Maximum Amount (a “Partial Drawing”).
6. More than one demand may be made (“Multiple Demands”). The aggregate of the Multiple Demands shall not exceed the Maximum Amount.
7. Payments under this letter of credit will be effected immediately to the account you specify in your demand.
8. This letter of credit and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The parties to this letter of credit irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction over any dispute or claim arising out of or in connection with this letter of credit or its subject matter or formation (including non-contractual disputes or claims).
9. Except to the extent it is inconsistent with the express terms of this letter of credit, this letter of credit is subject to the International Standby Practices ISP 98, ICC Publication No. 590.
Yours faithfully,
………...
For and on behalf of
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
7.
Appendix 2 - Form of Demand
To: [issuing bank, department and/or officer name and address]
[DATE]
Dear Sirs,
DEMAND UNDER IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: [NUMBER]
We, Electricity Settlements Company Limited, refer to the irrevocable letter of credit (“letter of
credit”) number [number] issued by you in our favour. This is a written demand under the letter
of credit. Terms defined in the letter of credit have the same meaning in this demand. We certify that we are entitled under the Capacity Regulations to draw down credit cover
provided by the Principal under the Capacity Regulations. The amount claimed by us is [currency and amount] (“Claimed Amount”), which we hereby demand.
We further certify that the aggregate of the Claimed Amount and all other amounts previously claimed by us under the letter of credit does not exceed the Maximum Amount specified in the letter of credit.
This demand is dated on or before the Expiry Date set out in the letter of credit.
We hereby demand immediate payment of the Claimed Amount and that the Claimed Amount be paid into the following bank account:
[details of account to be inserted by ESC].
Yours faithfully,
...
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
8.
Appendix 3 - Notice of Approved Credit Cover
This is an example of the ‘Notice of Approved Credit Cover’ issued by the ITSP to the Applicant.
Detailed specification for report / notice
Name: Notice of approved Credit Cover
CfD / CM: CM
To: CM Capacity Providers
Description: A notice stating that the Credit Cover provided by the applicant has been approved
Data items:
Date of notice DATE Date of issue of the notice
Applicant/ Capacity provider CHAR The identification of the Applicant
CMU ID CHAR The identification of the CMU which the Credit Cover was provided with respect to
Required amount of Credit Cover £ The total amount of Credit Cover required for that CMU Total received amount Credit
Cover in the form of Cash
£ The amount of Credit Cover (including the additional Credit Cover) that was received from the applicant as a cash deposit
Date the cash was received DATE The date which the latest cash deposit was received Received amount of Credit Cover
in the form of a Letter of Credit
£ The amount of Credit Cover (including the additional Credit Cover) that was received from the applicant as a letter of credit
Date the Letter of Credit was received
DATE The date which the Letter of credit was received
Letter of Credit Expiration date DATE The expiry date of any approved Letter of Credit that has been lodged
Total amount of Credit Cover received
£ The sum of the amount of Credit Cover received in the form of cash and Letter of Credit
WP35-CM APPLICANT /CAPACITY PROVIDER CREDIT
COVER PROCESS
9.
Appendix 4 - Notice of Unapproved Credit Cover
This is an example of the ‘Notice of Unapproved Credit Cover’ issued by the ITSP to the Applicant.
Detailed specification for report / notice
Name: Notice of unapproved Credit Cover
CfD / CM: CM
To: CM Capacity Provider
Description: A notice stating that the Credit Cover provided by the applicant has not been approved and the reason it was not approved
Data items:
Date of notice DATE Date of issue of the notice
Applicant/Capacity provider CHAR The identification of the Applicant
CMU ID CHAR The identification of the CMU which the Credit Cover
was provided with respect to
Required amount of Credit Cover £ The total amount of Credit Cover required for that CMU
Total received amount Credit Cover in the form of Cash
£ The amount of Credit Cover (including the additional Credit Cover) that was received from the applicant as a cash deposit
Date the cash was received DATE The date which the latest cash deposit was received Received amount of Credit Cover in
the form of a Letter of Credit
£ The amount of Credit Cover (including the additional Credit Cover) that was received from the applicant as a letter of credit
Date the Letter of Credit was received
DATE The date which the latest Letter of Credit was received
Letter of Credit Expiration date DATE The expiry date of any approved Letter of Credit that has been lodged
Total amount of Credit Cover received
£ The sum of the amount of Credit Cover received in the form of cash and Letter of Credit
Non-approval of Credit Cover CHAR/text This states the received Credit Cover has not been approved
Reason for non-approval Text The reason the Credit Cover has not been approved Date for additional Credit Cover DATE If the Credit Cover was not approved this is the date
by which the additional Credit Cover will need to be provided
