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The Texas PUC adopted an order without modification implementing changes to the letter of credit (LOC) required for retail electric provider (REP) certification and related provisions, at 16 Texas Administrative Code (TAC)  (See remainder of order (pgs. 101-177).

“The Public Utility Commission of Texas (commission) adopts amended 16 Texas Administrative Code CIAC) §25,107, relating to Certification and Obligations of Retail Electric Providers (REPs). The commission adopts these rules with changes to the proposed text as published in the April 17 , 2025 issue of the Texas Register ( 51 TexReg 2470 ). The commission also adopts amendments to three commission-prescribed forms: (1) the REP Irrevocable Stand-By Letter of Credit template; (2) the REP Application and Amendment Form; and (3) the REP Reporting Instructions Form. The rule will be republished.”

The amended rule implements the new electronic filing requirements applicable to REP letters of credit (LoCs) adopted in 2025 under Project 52059 which revised §22.71, relating to Commission Filing Requirements and Procedures, and §22.72, relating to Form Standards for Documents Filed with the Commission in Chapter 22 of the commission’s procedural rules. Specifically, §22.71(d)(1)(A) requires a REP with a physical irrevocable stand-by letter of credit (ILOC) on file with the commission as of the effective date of the section to file an original ILOC electronically on or before March 5,2027. The amended rule accordingly details the specific procedures and requirements for filing REP ILOCs electronically with the commission.

The amended rule also revises the definition of “affiliate” to more appropriately conform with the disclosure and financial requirements of §25.107. The amended rule also makes minor clarifying changes to requirements applicable to Option 2 REPs and to the financial documentation requirements of segregated cash accounts and escrow accounts.

Amendments to the REP Irrevocable Stand-By Letter of Credit template include conforming revisions to reflect electronic filing, including the prohibition on amending an ILOC without commission approval and the authorization for the commission to present or terminate an ILOC by electronic transmission. Amendments to the REP Application and Amendment Form and REP Reporting Instructions Form are conforming changes to reflect the amended rule, ILOC electronic filing requirements, as well as the revised definition of “affiliate.”

Summary of Electronic Filing and Updated ILOC Template Timeline

“The adopted amendments establish separate deadlines for electronic filing of irrevocable stand-by letters of credit (ILOCs) and for transition to the commission’s updated ILOC template.

Beginning on the effective date of the amended rule, any new ILOC executed for purposes of compliance with §25.107 must use the updated commission template and must be filed electronically in Project No. 37919. Existing ILOCs may continue to use the prior template until August 15, 2027, and may  be maintained or amended using that template until that date. By March 5,2027, any REP relying on an existing physical ILOC must ensure that its current ILOC has been electronically filed in Project No. 37919 in accordance with §22.71. A REP relying on a physical ILOC that has been previously scanned and filed is in compliance with the March 5 deadline. By August 15, 2027, all existing ILOCs must be re-issued or amended to conform to the updated commission template. Accordingly, March 5,2027 serves as the deadline for electronic filing of existing ILOCs, while August 15, 2027 serves as the deadline for transition of all existing ILOCs to the updated template.”