Common use of Financial Security Arrangements Clause in Contracts

Financial Security Arrangements. At least 20 Business Days prior to the commencement of the design, procurement, installation, or construction of a discrete portion of the Utility’s Interconnection Facilities and Upgrades, the Interconnection Customer shall provide the Utility, at the Interconnection Customer’s option, a guarantee, a surety bond, letter of credit or other form of security that is reasonably acceptable to the Utility and is consistent with the Uniform Commercial Code of North Carolina. Such security for payment shall be in an amount sufficient to cover the costs for constructing, designing, procuring, and installing the applicable portion of the Utility’s Interconnection Facilities and Upgrades and shall be reduced on a dollar-for-dollar basis for payments made to the Utility under this Agreement during its term. In addition: 6.3.1 The guarantee must be made by an entity that meets the creditworthiness requirements of the Utility, and contain terms and conditions that guarantee payment of any amount that may be due from the Interconnection Customer, up to an agreed-to maximum amount. 6.3.2 The letter of credit or surety bond must be issued by a financial institution or insurer reasonably acceptable to the Utility and must specify a reasonable expiration date. 6.3.3 The Utility may waive the security requirements if its credit policies show that the financial risks involved are de minimus, or if the Utility’s policies allow the acceptance of an alternative showing of credit- worthiness from the Interconnection Customer.