NAC704.79529. Bond rating or security deposit requirement; amount of security deposit.

     1. Except as otherwise provided in subsection 2, an alternative seller that provides gas supply or retail procurement service shall have and maintain a long-term bond rating, or other senior debt rating, of at least BBB- or an equivalent rating as determined by Standard & Poor’s Ratings Services or another recognized debt rating service in the United States or Canada.

     2. In lieu of having and maintaining the long-term bond rating or other senior debt rating required pursuant to subsection 1, an alternative seller that provides gas supply or retail procurement service may maintain a security deposit that is made payable to the Commission. The security deposit must be in the form of:

     (a) A renewable surety bond issued by a major insurance company; or

     (b) A guarantee with a guarantor possessing a credit rating of Baa2 or higher from Moody’s Investor’s Service or BBB or higher from Standard and Poor’s Ratings Services, Fitch IBCA or Duff & Phelps Credit Rating Company, except that if the Commission determines that a material change in the creditworthiness of the guarantor has occurred, the Commission may require the alternative seller to use a different guarantor.

     3. The security deposit required pursuant to subsection 2 is an amount equal to the revenue required to provide service to the customers of the alternative seller for 2 months pursuant to NRS 704.999, except that the initial security deposit required is the greater of $250,000 or an amount calculated by using the rates for service set forth in the tariffs filed pursuant to NRS 704.999 multiplied by a good faith estimate of the expected volume of natural gas service to be provided by the alternative seller during its first 2 months of operation. The alternative seller shall, every 6 months after the date on which it first provides service to customers, update the security deposit based on the average volume of natural gas provided by the alternative seller to customers during that 6-month period.

     (Added to NAC by Pub. Utilities Comm’n by R103-99, eff. 12-2-99)