How does a project qualify to have collateral withheld from the first REC payment?

The Revised Long-Term Renewable Resources Procurement Plan approved by the Illinois Commerce Commission on February 18, 2020 included changes in collateral withholding provisions. Implementing those changes will require the development of a new REC contract, which is expected to occur over the course of Spring 2020. Until that process is completed and a new contract in use, the current collateral withholding process will remain in effect. This FAQ clarifies the current process.

In order to have collateral withheld from the first REC payment rather than having to post collateral in the form of cash or a letter of credit, a Designated System must:

  1. Be interconnected and generating electricity as of the date of ICC approval (Trade Date);
  2. Have an irrevocable standing order with no end date initiated with the contracting utility in PJM-GATS or M-RETS within 30 business days of the Trade Date;
  3. Be Part II Verified by the Program Administrator, as evidenced by the issuance of Schedule B to Exhibit A, within 30 business days of the Trade Date;
    • The Approved Vendor must submit Part II of a Designated System’s project application at least four weeks prior to the collateral due date to allow the Program Administrator sufficient time to review the submission and issue Schedule B to Exhibit A. Please see this FAQ for additional detail.
  4. Have a request made via email by the Approved Vendor to the contracting utility requesting that the utility withhold collateral from the Approved Vendor’s first REC payment. To ensure that the contracting utility has sufficient time to process the request and recalculate the collateral amount due, this request must be made as soon as possible after the Approved Vendor’s receipt of the Schedule B and no later than 25 business days after the Trade Date.  The email requesting withholding of collateral must include the application ID, batch ID, contract ID, Trade Date, interconnection date, and Approved Vendor name.

Email requests for collateral withholding should be directed to the following contacts for a project’s contracting utility, which may be different from the interconnecting utility:

Once the contracting utility verifies that a Designated System meets the criteria to have collateral withheld from the first REC payment:

  • The contracting utility will confirm via email to the Approved Vendor that the Designated System qualifies for collateral withholding.
  • Once the Approved Vendor receives the Program Administrator’s invoice during the quarterly invoicing window, the Approved Vendor will append to the Program Administrator’s invoice a line item for each Designated System from which collateral will be withheld, noting the collateral amount from the Schedule B for each Designated System.


System ID xxx – collateral withholding $xx,xxx.xx
  • The contracting utility will review the Approved Vendor’s invoice and provide any feedback and/or corrections that may be needed.
  • Once the contracting utility verifies that the Approved Vendor’s invoice is correct, it will provide payment in accordance with the terms of the REC contract.

Please note that the invoices and Quarterly Netting Statements originally generated by the Program Administrator at the beginning of each quarterly invoicing window represent the Maximum Allowable Payment for the Quarterly Period. The amount contained on that initial invoice does not reflect any collateral withheld under modified Section 4.3(a) of the Master REC Agreement of the REC Contract. In the case of an individual Designated System’s Collateral Requirement being withheld from its first REC payment, the actual amount due will be lower than that listed on the original invoice.