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 attachment facilities and distribution upgrades, the Interconnection Customer shall provide the utility, at the IC'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 the jurisdiction where the point of interconnection is located. Such security for payment shall be in an amount sufficient to cover the costs for designing, procuring, installing, and constructing the applicable portion of the attachment facilities and distribution 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 IC, 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 insured reasonably acceptable to the utility and must specify a reasonable expiration date.