4605.1 Applicability. Any Applicant or Licensee that can provide credible evidence that it meets one of the following standards is not required to post an Integrity Bond in the District of Columbia:

1. (a) A current credit rating of BBB- or higher from a nationally recognized credit rating service;
2. (b) A current commercial paper rating of A2 or higher by Standard & Poor’s and/or P2 or higher by Moody’s or similar rating by another nationally recognized rating service; or
3. (c) An unused line of bank credit or parent guarantees deemed adequate by the Commission.

4605.2

1. (a) Exclusion. An Applicant or Licensee that cannot provide evidence to the satisfaction of the Commission that it meets the standards listed in § 4605.1 will be required to submit an initial Integrity Bond of fifty thousand dollars ($50,000), unless that Applicant or Licensee is applying to provide service as an Aggregator (as defined in D.C. Official Code § 34-1501(2) and § 4699.1 who does not take title to electricity or as a Broker (as defined in D.C. Official Code § 34-1501(7) and §4699.1), in which case a ten thousand dollar ($10,000) Integrity Bond will be required. However, an Applicant or Licensee that meets the standards listed in § 4605.1 may still be required to provide a bond to demonstrate financial integrity for the Application on a case-by-case basis.
2. (b) Updates. The Commission in its sole discretion may determine whether or not to reevaluate the amount of the Integrity Bond in light of any changing conditions in the electricity market at the time that a Licensee submits updated information, taking into consideration the Licensee’s previous and ongoing relationship with its Customers and its historical compliance with Commission rules and requirements. The Commission may request such information from the Licensee as may be necessary to make its evaluation. Aggregators who do not take title and Brokers will not be required to update the initial $10,000 Integrity Bond.
3. (c) After continuously providing service in the District for two (2) years, any Licensee that has submitted an Integrity Bond to the Commission in compliance with these requirements may request that the Commission return the previously posted Integrity Bond and waive the requirement for

a future bond based upon the Licensee's demonstrated record of continuous and uninterrupted service in the District of Columbia, without meaningful substantiated consumer complaints, as determined by and in the opinion of the Commission, and such other information as the Licensee may choose to present to the Commission. The Commission may accept or reject this request based on a review of information provided by the Licensee and such other information as the Commission may deem appropriate. The Commission retains the discretion to require an Integrity Bond of the Licensee at a later date if circumstances change, or if the Commission otherwise deems the requirement of an Integrity Bond to be necessary and appropriate. A Licensee that is not currently providing service and cancels its bond shall have its license suspended immediately, and is subject to revocation of its license in thirty (30) days following the bond cancellation.

4605.3 Form of the Bond. Any Applicant or Licensee required to provide a bond under this section shall provide a bond issued by a company authorized to do business in the District of Columbia in a form required by the Commission. At a minimum, this form shall:

1. (a) Designate the Commission, as the sole beneficiary of the bond;
2. (b) Be continuous in nature. If any Licensee seeks to cease providing the bond it shall seek approval from the Commission at least sixty (60) days prior to the time it wants to discontinue maintaining the bond;
3. (c) Cover payment of the Licensee's District of Columbia Deposits and Prepayments that occurred while the bond was in force as identified by the Commission under these regulations; and
4. (d) State that the proceeds of the bond shall be paid or disbursed as directed by the Commission.

4605.4 Commission Verification. Each Licensee shall provide appropriate certification as prescribed by §§ 4604.2 (b) and (c). The Commission may request such information from the Licensee as is necessary to verify the accuracy of the certification at any time.

4605.5 Bond Foreclosure. The Commission's foreclosure of an Integrity Bond shall be limited to those instances where damages to the Customer(s) by the Licensee are actual. In order to draw funds on this Bond, the Commission shall determine that the Licensee is financially insolvent or unable to meet its obligations as a Licensee to a Customer(s) who has suffered actual damages by means of failure, or by reason of the Licensee's breach of contract or violation of the Act and any

orders, regulations, rules or standards promulgated thereto.

SOURCE: Final Rulemaking published at 65 DCR 9970 (September 28, 2018 – Vol. 1).