Block Energy FAQs 2026

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FAQ-BEC-49

Q: What is Performance Assurance under the (AIC) Financially-Settled Capacity Agreement based on? Can you provide an example of how it is calculated?

Performance Assurance under the (AIC) Financially-Settled Capacity Agreement is based on an aggregate amount equal to the Total Exposure Amount less the applicable Collateral Threshold Amount. “Total Exposure Amount” means an amount calculated each Business Day reflecting the total credit exposure of the Buyer, on an aggregate basis, consisting of the sum of: (i) the Exposure amount (however so calculated under a Confirmation Agreement and any other Fixed Price Customer Supply Contracts) calculated by the Buyer in a commercially reasonable manner; provided, that if a Fixed Price Customer Supply Contract does not include provisions for margining mark-to-market exposure, then such Fixed Price Customer Supply Contract will not be included for purposes of this calculation; and (ii) any amount required as security from the Seller pursuant to any other Fixed Price Customer Supply Contract that is not collateral posted as margin and treated as part of any Exposure amount; provided, however, that in the event the Total Exposure Amount for any day is a negative number, the Total Exposure Amount shall be deemed to be zero for such day.

Under the (AIC) Financially-Settled Capacity Agreement, the quantity of Financial ZRCs for each Season of the applicable Planning Year, and the Fixed Price(s) associated with each Season of the applicable Planning year, are set forth in Table A.

Under the (AIC) Financially-Settled Capacity Agreement, “Exposure” means 10% of the Remaining Contract Value; and “Remaining Contract Value” means the sum across all Seasons of the following calculations: for each Season separately, the product of (a) the Fixed Price, (b) the Contract Quantities, (c) number of days remaining in the Season for which no payment has been made. Notwithstanding the foregoing, for a Season in a Planning Year, in the event that the applicable ACP is established by MISO for such Season, and such ACP is higher than the Fixed Price associated with such Season, and if Seller makes payment to Buyer based on the calculations set forth in Section 1 of the Agreement for a portion of the Contract Quantity, then such portion of the Contract Quantity will not be included in the calculation of the Remaining Contract Value. Additionally, with respect to a Season in a Planning Year, in the event that the applicable ACP is established by MISO for such Season, and such ACP is lower than the Fixed Price associated with such Season, then the Contract Quantity applicable to such Season will not be included in the calculation of the Remaining Contract Value.

For simplicity in our example below we assume that the Seller does not have other transactions with the Buyer, which may add to the credit exposure for which Performance Assurance is associated with. We also assume that the Seller is interested in the (AIC) Financially-Settled Capacity Agreement only.

In the following example we assume that the Commission has approved for the Seller, for each of the four Seasons of the 2028-2029 Planning Year, 100 Financially-Settled ZRCs at an Average Winning Bid Price of $100/MW-Day.

Thus, the Remaining Contract Value is calculated as follows:

Remaining Contract Value = ($100 x 100 ZRCs x 92 days) + ($100 x 100 ZRCs x 91 days) + ($100 x 100 ZRCs x 90 days) + ($100 x 100 ZRCs x 92 days) = $3,650,000

The Exposure is equal to 10% of the Remaining Contract Value:

10% of Remaining Contract Value = $365,000

05-26-2026

Post-Bid Collateral

FAQ-BEC-47

Q: How is the Remaining Contract Value calculated under the (AIC) Capacity Agreements?

Under the MISO-Delivered Capacity Agreement, “Remaining Contract Value” means the summation of the undelivered Contract Quantity(ies) multiplied by the applicable Contract Price for such Contract Quantity(ies) multiplied by the days in the applicable Season in the applicable Planning Year. For the avoidance of doubt, if Seller delivers Product for any applicable Season of a Planning Year or if Seller pays Buyer for the undelivered portion of the Contract Quantity, then the Contract Quantity(ies) applicable to such Product will not be included in the calculation of the Remaining Contract Value.

Under the Financially Settled Capacity Agreement, “Remaining Contract Value” means the sum across all Seasons of the following calculations: for each Season separately, the product of (a) the Fixed Price, (b) the Contract Quantities, (c) number of days remaining in the Season for which no payment has been made. Notwithstanding the foregoing, for a Season in a Planning Year, in the event that the applicable ACP is established by MISO for such Season, and such ACP is higher than the Fixed Price associated with such Season, and if Seller makes payment to Buyer based on the calculations set forth in Section 1 of the Agreement for a portion of the Contract Quantity, then such portion of the Contract Quantity will not be included in the calculation of the Remaining Contract Value. Additionally, with respect to a Season in a Planning Year, in the event that the applicable ACP is established by MISO for such Season, and such ACP is lower than the Fixed Price associated with such Season, then the Contract Quantity applicable to such Season will not be included in the calculation of the Remaining Contract Value.

05-15-2026

Post-Bid Collateral

FAQ-BEC-44

Q: How is performance assurance calculated under the (AIC) Capacity Agreements?

Performance Assurance under each of the (AIC) Capacity Agreements (the (AIC) MISO-Delivered Capacity Agreement and the (AIC) Financially-Settled Capacity Agreement) is based on an aggregate amount equal to the Total Exposure Amount less the applicable Collateral Threshold Amount. The requirements for posting, transferring, holding and using Performance Assurance are set forth in Attachment A of each (AIC) Capacity Agreement.

“Total Exposure Amount” means an amount calculated each Business Day reflecting the total credit exposure of the Buyer, on an aggregate basis, consisting of the sum of: (i) the Exposure amount (however so calculated under a Confirmation Agreement and any other Fixed Price Customer Supply Contracts) calculated by the Buyer in a commercially reasonable manner; provided, that if a Fixed Price Customer Supply Contract does not include provisions for margining mark-to-market exposure, then such Fixed Price Customer Supply Contract will not be included for purposes of this calculation; and (ii) any amount required as security from the Seller pursuant to any other Fixed Price Customer Supply Contract that is not collateral posted as margin and treated as part of any Exposure amount; provided, however, that in the event the Total Exposure Amount for any day is a negative number, the Total Exposure Amount shall be deemed to be zero for such day.

“Collateral Threshold Amount” means, with respect to the Seller or its Guarantor, if applicable, the amount determined in accordance with Table B provided in the applicable (AIC) Capacity Agreement.

Under the (AIC) MISO-Delivered Capacity Agreement, “Exposure” means the sum of: (i) 10% of the Remaining Contract Value under the (AIC) MISO-Delivered Capacity Agreement as determined by Buyer in a commercially reasonable manner and (ii) the summation across the applicable Seasons the following calculation: for each Season separately, in the event that the Seasonal Total Reduction is greater than the Seasonal Total, 100% of the positive difference between the Seasonal Total Reduction and the Seasonal Total net of any payment made to Buyer in connection with the Adjusted Seasonal Total. The Seasonal Total, Seasonal Total Reduction, and Adjusted Seasonal Total are described on page 2 to the (AIC) MISO-Delivered Capacity Agreement. The Remaining Contract Value is described on page 14 of the (AIC) MISO-Delivered Capacity Agreement.

Under the (AIC) Financially-Settled Capacity Agreement, “Exposure” means 10% of the Remaining Contract Value under the (AIC) Financially-Settled Capacity Agreement as determined by Buyer in a commercially reasonable manner. The Remaining Contract Value is described on page 12 of the (AIC) Financially-Settled Capacity Agreement.

Any required Performance Assurance may be posted in the form of cash or a letter of credit. The standard forms of the guaranty and the letter of credit are appended to each of the (AIC) Capacity Agreements. There is a Minimum Transfer Amount, defined under the applicable supplier agreements, of $10,000 (subject to rounding). However, if the bidder has entered into one or more energy or swap Fixed Price Customer Supply Contracts for energy in addition to the (AIC) Capacity Agreement(s), the “Minimum Transfer Amount” shall equal $100,000. Please see Attachment A to the (AIC) Capacity Agreements for additional information regarding rounding.

It is the responsibility of each bidder to review the terms of the applicable (AIC) Capacity Agreement (MISO-Delivered Capacity Agreement and/or Financially-Settled Capacity Agreement) posted to the Block Energy and Capacity Procurement section of the procurement website. Each bidder accepts these terms as a condition of its participation in the BEC RFP.

05-07-2026

Post-Bid Collateral

FAQ-BEC-13

Q: What is a “Bid” on a “Combination” in the block energy procurement events?

A “Product” is a constant quantity of energy to be supplied to a Company at the delivery point specified by that Company in either the On-Peak Segment or the Off-Peak Segment of a specific month. A “Combination” is a grouping of two (2) or more Products in a given Segment and in a given year (and for a given Company). A “Bid” is the price that the Bidder is willing to accept to deliver each MWh in one (1) block to the Company. A Bid must be displayed as a price in $/MWh for one (1) block of a Product or for one (1) block of a Combination.

Each Bid constitutes a binding and irrevocable offer to supply a block of a Product or a block of the Combination at the price provided as the Bid and under the terms of the applicable supplier contract. For example, a Bid for the On-Peak Jun27 to May28 Combination for a Company constitutes a binding and irrevocable offer to supply a block of each of the 12 Products included in the Combination at the price provided as the Bid for the On-Peak Jun27 to May28 Combination and under the terms of the applicable supplier contract.

04-09-2026

Bids Rules

FAQ-BEC-12

Q: We are going to post cash as bid assurance collateral. Can you provide a phone number for each of the Companies for purposes of confirming wire transfers?

Please contact the Procurement Administrator at Illinois-RFP@nera.com to receive this information.

03-24-2026

Bid Assurance Collateral

FAQ-BEC-11

Q: What is a “Bid” in the block energy procurement events? What is the price paid to a winning Bidder for each block of an Energy Product that such Bidder won?

A “Bid” is the price that the Bidder is willing to accept to deliver each MWh in one (1) block to the Company. A Bid must be displayed as a price in $/MWh for one (1) block of a Product or for one (1) block of a Combination. A block represents 25 MWs in each hour of a Product. A “Product” is a constant quantity of energy to be supplied to a Company at the delivery point specified by that Company in either the On-Peak Segment or the Off-Peak Segment of a specific month. A “Combination” is a grouping of two or more Products in a given Segment (and for a given Company).

For a given Company, in a given Segment of a given month, a Seller provides a constant amount of energy corresponding to the sum of the number of blocks won of the Product for that Segment of that month, and the number of blocks won of any Combination that includes that Segment of that month, times 25 MW. For each Segment of each month, the price paid to the Bidder is the average of the Bidder’s own approved Bids for all blocks of that Product and for all blocks of a Combination that includes that Segment of that month. The Seller is paid potentially a different price for each On-Peak Segment and Off-Peak Segment and each month of the June 1, 2026 to May 31, 2029 period for which energy is purchased through the procurement event for a Company. Each month for which the Seller has an approved Bid will be considered a Delivery Period.

03-09-2026

Bids Contract Rules

FAQ-BEC-10

Q: What is the minimum number of ZRCs a bidder can specify as the maximum willingness to supply (“MWS”) for a Product?

A Bidder may, but is not required to, specify a MWS for a Product, which is the maximum number of ZRCs, across MISO-Delivered ZRCs and Financially-Settled ZRCs, that the Bidder is willing to win for that Product, across all ZRCs bid on that Product individually as well as all ZRCs bid on Combinations that include that Product.

A Bid for Financially-Settled ZRCs for a given Season of a Planning Year must be for at least four (4) ZRCs at each price point. A Bid for MISO-Delivered ZRCs for a given Season and Source Zone of a Planning Year must be for at least four (4) ZRCs at each price point. As such, if a Bid for ZRCs has been placed for a given Season, the specified ZRC MWS for that Product must be at least four (4) ZRCs. There is no minimum quantity requirement for a Bid for a Combination.

The ZRC Default MWS may be less than four (4) ZRCs in the case where the Bidder submits a Bid on a Combination only, for a quantity of less than four (4).

If a Bidder does not specify a maximum willingness to supply, it will be assumed, for each Product, that the Bidder is willing to win up to the number of ZRCs bid across MISO-Delivered ZRCs and Financially-Settled ZRCs for that Product and across ZRCs bid on that Product individually and the Combinations that include that Product, or that the Bidder is willing to win up to the ZRC Target for that Product, whichever is smaller.

Please see Section V.10 of the RFP Rules for additional information regarding Bids on Capacity Products and maximum willingness to supply.

03-09-2026

Bids Rules

FAQ-BEC-9

Q: The RFP Rules state that “A Bid for ZRCs for a given Season of a Planning Year must be for at least four (4) ZRCs. There is no minimum quantity requirement for a Bid for a Combination.” Why is there a minimum quantity Bid for ZRCs for a given Season of a Planning Year?

The minimum quantity requirement, which applies to Bids for both Financially-Settled ZRCs for a given Season of a Planning Year at each price point and MISO-Delivered ZRCs for a given Season and Source Zone of a Planning Year at each price point was introduced to align with the number of months relevant to a Bid for a Planning Year in procurement events held prior to MISO’s change to a seasonal construct. Prior to MISO’s change to a seasonal construct, a Bid for a Planning Year consisted of 12 months and after the change, a Bid for a Season of a Planning Year consisted of three months. A Bid is again relevant to 12 months with the introduction of the minimum quantity requirement.

03-09-2026

Bids Rules

FAQ-BEC-8

Q: Can you provide an example where the financial settlement amount under the (AIC) Financially-Settled Capacity Agreement results in a payment from the Seller to AIC?

Under the terms of the (AIC) Financially-Settled Capacity Agreement, for a given Season of a Planning Year, the financial settlement amount is equal to the multiplicative product of (a) the result obtained by subtracting the ACP for the AIC Compliance Zone for such Season from the average of the Seller’s own approved Bids for such Season, in $/MW-day, (b) the number of calendar days in the Season, and (c) the number of Financially-Settled ZRCs approved by the Commission for the Season. The financial settlement can only be calculated once the MISO Planning Resource auction is completed for the Planning Year and the ACP for the AIC Compliance Zone is available. If the financial settlement amount is negative, then the Seller shall pay AIC the absolute value of this amount in accordance with the terms of the agreement.

No. of Financially-Settled ZRCs approved by the Commission for the Seller: 25 ZRCs for the Summer season
Average Winning Bid Price for the Summer season under the (AIC) Financially-Settled Capacity Agreement: $10/MW-day
AIC Compliance Zone ACP = $15/MW-day

Financial Settlement Amount = ($10 – $15) x 92 days x 25 ZRCs = – $11,500 (i.e., payment from Seller to AIC)

03-09-2026

Contract

FAQ-BEC-7

Q: Can you provide an example where the financial settlement amount under the (AIC) Financially-Settled Capacity Agreement results in a payment from AIC to the Seller?

Under the terms of the (AIC) Financially-Settled Capacity Agreement, for a given Season of a Planning Year, the financial settlement amount is equal to the multiplicative product of (a) the result obtained by subtracting the ACP for the AIC Compliance Zone for such Season from the average of the Seller’s own approved Bids for such Season, in $/MW-day, (b) the number of calendar days in the Season, and (c) the number of Financially-Settled ZRCs approved by the Commission for the Season. The financial settlement can only be calculated once the MISO Planning Resource auction is completed for the Planning Year and the ACP for the AIC Compliance Zone is available. If the financial settlement amount is positive, then AIC shall pay the Seller this amount in accordance with the terms of the agreement.

No. of Financially-Settled ZRCs approved by the Commission for the Seller: 25 ZRCs for the Summer season
Average Winning Bid Price for the Summer season under the (AIC) Financially-Settled Capacity Agreement: $10/MW-day
AIC Compliance Zone ACP = $5/MW-day

Financial Settlement Amount = ($10 – $5) x 92 days x 25 ZRCs = $11,500

03-09-2026

Contract

FAQ-BEC-6

Q: I understand that there could be a payment adjustment on delivered ZRCs under the (AIC) MISO-Delivered Capacity Agreement if the ZRCs are not from the compliance zone. Is this payment adjustment based on distance from the Compliance Zone (LRZ 4)?

The payment adjustment is based on the difference between the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Source Zone associated with the ZRCs and the Compliance Zone (LRZ 4). Please see FAQ-BEC-3 and FAQ-BEC-4 for examples of the payment adjustment.

03-09-2026

Contract

FAQ-BEC-5

Q: With reference to the (AIC) MISO-Delivered Capacity Agreement, please confirm that there are no payment adjustments for ZRCs that are from the compliance zone, which is LRZ 4.

Yes, this is correct. Only ZRCs from outside the compliance zone are subject to payment adjustments under the term of the (AIC) MISO-Delivered Capacity Agreement.

03-09-2026

Contract

FAQ-BEC-4

Q: I understand that there could be a payment adjustment on delivered ZRCs under the (AIC) MISO-Delivered Capacity Agreement if the ZRCs are not from the compliance zone. Can you provide an example where the adjustment will add to the payment to Seller?

Under the terms of the (AIC) MISO-Delivered Capacity Agreement, payments to Seller will only be adjusted to reflect an increased payment if the Source Zone ACP in a season is greater than the Compliance Zone ACP in that season where the Compliance Zone is LRZ4.

For purposes of the below example, the “ACP” refers to the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Summer season for the 2027/2028 Planning Year and the Compliance Zone is LRZ4. The example below is hypothetical. The results of the 2027/2028 MISO PRA are not yet available.

No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) MISO-Delivered Capacity Agreement: $10/MW-day
Payment to Seller = $10 x 25 ZRCs x 92 days = $23,000
MISO Summer 2027/2028 PRA Results:
LRZ 4 ACP = $6/MW-day
LRZ 3 ACP = $20/MW-day
Adjustment to Payment = ($20 – $6) x 25 ZRCs x 92 days = $32,200
Adjusted Payment = $23,000 + $32,200 = $55,200

03-09-2026

Contract

FAQ-BEC-3

Q: I understand that there could be a payment adjustment on delivered ZRCs under the (AIC) MISO-Delivered Capacity Agreement if the ZRCs are not from the compliance zone. Can you provide an example where the adjustment will result in a reduced payment to Seller?

Under the terms of the (AIC) MISO-Delivered Capacity Agreement, payments to Seller will be reduced if the Compliance Zone ACP in a season is greater than the Source Zone ACP in that season where the Compliance Zone is LRZ4. If the amount of the payment reduction is greater than the unadjusted payment, then Seller (not Buyer) will have to pay Buyer under the (AIC) MISO-Delivered Capacity Agreement. We provide 2 examples below to illustrate this point.

For purposes of the below examples, the “ACP” refers to the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Summer season for the 2027/2028 Planning Year and the Compliance Zone is LRZ4. The examples below are hypothetical. The results of the 2027/2028 MISO PRA are not yet available.

Example 1: Where the adjustment results in a reduced payment from Buyer to Seller.
No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) MISO-Delivered Capacity Agreement: $18/MW-day
Payment to Seller = $18 x 25 ZRCs x 92 days = $41,400
MISO Summer 2027/2028 PRA Results:
LRZ 4 ACP = $20/MW-day
LRZ 3 ACP = $6/MW-day
Adjustment to Payment = – ($20 – $6) x 25 ZRCs x 92 days = – $32,200
Adjusted Payment = $41,400 – $32,200 = $9,200

Example 2: Where the adjustment results in payment from Seller to Buyer.
No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) MISO-Delivered Capacity Agreement: $10/MW-day
Payment to Seller = $10 x 25 ZRCs x 92 days = $23,000
MISO Summer 2027/2028 PRA Results:
LRZ 4 ACP = $20/MW-day
LRZ 3 ACP = $6/MW-day
Adjustment to Payment = – ($20 – $6) x 25 ZRCs x 92 days = – $32,200
Adjusted Payment = $23,000 – $32,200 = – $9,200  (i.e., payment from Seller to Buyer)

03-09-2026

Contract

FAQ-BEC-2

Q: Where can I find the results from previous RFPs for Block Energy and Capacity Products?

The results from previous procurement events can be found on the procurement website. If you click on the “Previous RFPs” link on the left-hand side of the home page, you can find a list of previous procurements. The results are posted on each procurement’s archived page.

03-06-2026

FAQ-BEC-1

Q: Our bank is requiring the physical address of a Beneficiary for purposes of issuing a Pre-Bid Letter for a Company even though the bank will submit the Pre-Bid Letter of Credit to a Company and to the Procurement Administrator as an electronic PDF file via electronic means only. Can you provide the physical addresses for the Companies for purposes of issuing Pre-Bid Letters of Credit?

Please email the Procurement Administrator at Illinois-RFP@nera.com to receive this information.

03-05-2026

Bid Assurance Collateral