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California bonds

California — Southern California Edison Company Surety Bond

The Southern California Edison Company (SCE) Surety Bond is a financial security instrument required for entities interconnecting electric energy generating facilities to the SCE electric system. This bond acts as a guarantee that the project developer, or Principal, will fulfill financial obligations related to grid interconnection tariffs or specific generator interconnection agreements.

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Recorded state
California
Bond type
General License, Permit or Compliance Bond
Category
Other licenses & permits

What this bond does

The bond serves as collateral to protect SCE if a project developer fails to meet the financial requirements established in their interconnection agreement or tariff. It provides a mechanism for SCE to recover funds through a demand notice if the developer defaults on specified financial obligations or fails to replace the security as required.

Who needs it
This bond is intended for owners, lessees, or operators of electric energy generating facilities seeking to interconnect their systems with Southern California Edison's grid in California.
Who it protects
This bond protects Southern California Edison Company as the Obligee. It ensures that the utility has access to guaranteed funds if the Principal fails to satisfy terms outlined in the relevant grid interconnection tariff or the Generator Interconnection Agreement.

Your bond option

This is the option on record for this bond.

The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.

Understanding the Bond Obligation

The bond is an irrevocable, unconditional financial guarantee that supports the Principal's compliance with interconnection tariffs or agreements. By providing this security, the Principal fulfills mandatory collateral requirements necessary for project development and ongoing grid connection.

Sureties issuing these bonds must be admitted in California, hold an A or better credit rating from Standard and Poor’s or A2 or better from Moody’s, and remain listed on the U.S. Department of Treasury’s Circular 570. The bond amount must align with the Principal's specific interconnection financial security requirements as determined by SCE.

Terms and Termination

The bond generally features an initial term determined at issuance with an automatic 365-day renewal period. This ensures continuous financial coverage for the duration of the interconnection agreement or project phase unless specifically terminated.

Termination by the Surety requires at least 60 days' notice to SCE and the Principal. Even after such termination, the Surety remains liable for any obligations incurred by the Principal during the period the bond was active prior to its expiration.

Claims and Demands

SCE may initiate a demand for payment if the Principal fails to meet its financial obligations or fails to replace the bond prior to expiration. Upon receiving a valid Demand Notice, the Surety must issue payment via wire transfer within five business days.

The obligation to pay is absolute and independent of any disputes between the Principal and SCE. The Surety is required to honor payment demands regardless of the Principal's counterclaims, insolvency, or other potential legal defenses against the utility.

Sources

Have these ready

  1. Obtain the specific bond amount and contract identification number from your SCE Project Manager.
  2. Verify that your chosen surety provider meets SCE's credit rating and Treasury listing requirements.
  3. Complete the standard SCE Surety Bond form, ensuring all fields are filled accurately to avoid delays.
  4. Submit a draft of the security to your SCE Project Manager and the designated collateral email address for review before final execution.
  5. Ensure the final document is delivered to the Risk Operations & Collateral Manager at the designated Rosemead, California address by the specified due date.

Questions about this bond

Can the bond terms be modified?

SCE requires the use of their standard bond forms. If modifications are necessary, you must submit a draft to your SCE Project Manager for review at least two business days prior to the required posting date.

What happens if the Principal fails to pay bond fees?

The Principal is responsible for all commissions and fees. Failure to pay these costs does not grant the Surety or Principal the right to terminate the bond.

Does this bond cover customer debts?

No. This bond is strictly for financial security related to grid interconnection tariffs and agreements between the developer and Southern California Edison.

How are notices delivered?

Notices must be provided in writing via electronic transmission, hand delivery, or overnight courier, with specific timelines defined for each delivery method in the bond agreement.

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