Per the System Operator portal, "The NYISO is responsible for managing New York’s electric grid and its competitive wholesale electric marketplace. The agency does not generate power or own transmission lines but rather works with power producers, utility companies, and stakeholders to meet the power needs of New Yorker businesses and individuals’. The ISO is committed to a fair, transparent market system because it helps us deliver the lowest cost wholesale power solutions." Power intermediaries are a important participants in the market system. A NYISO bond is generally required from such operators to guarantee fulfillment of its duties under an operating agreement.
In the 1990s, the Federal Energy Regulatory Commission (FERC) opened access to transmission lines for competitors to buy and sell power, separating generation, transmission, and distribution services. In accordance with the new regulation, the New York State Public Service Commission (PSC) established a competitive mechanism to allow customers to choose their electric supplier. Private power brokers operate under this scheme, delivering power to consumers and paying the appropriate tariffs to the State of New York. The NYISO bond guarantees compliance of an intermediary's fiscal and performance obligations. The surety bond must satisfy the credit requirements established in the OATT and Services Tariff to participate in the markets administered by the NYISO. The obligation guarantees the payment of assessed amounts as specified by the NYISO upon receipt of a demand for payment notice (“Demand for Payment Notice”). If a licensee defaults on its agreement, then the surety is also obligated to pay all reasonable costs incurred by the NYISO in the enforcement of the NYISO bond, including attorney fees and expenses which can be greater than the penal sum of the surety bond. The surety company must appear on the U.S. Treasury's circular of sureties acceptable for federal obligations and carry a minimum A.M. Best rating of “A”. NYISO surety bond questions and filings should be directed to:
The New York Independent System Operator, Inc.
Attn: Credit Manager
10 Krey Boulevard
Rensselaer, NY 12144-9681
PJM/Exelon offers an excellent presentation on surety bonds as an alternative to letters of credit to satisfy the NYISO financial assurance requirements.
New York surety bond leader, Surety One, Inc. offers same-day quoting of energy sector surety bonds. Both small and large commercial accounts are welcome. Our special program affords access to surety support for all financial conditions. For more information call (800) 373-2804, email Underwriting@SuretyOne.com or click here to discuss a NYISO bond.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.