(1) To become eligible to be selected as a default supplier for small customers of a distribution services provider, an interested person must obtain a license from the commission pursuant to this rule.   License applications must be filed with the commission and a copy sent to the distribution services provider serving the area(s) in which the person wishes to be the default supplier.   A person who obtains a license pursuant to this rule is eligible to become a default supplier, but must be specifically designated a default supplier by the commission before providing service to any small customers.   License applications must include the following information:

(a) complete business name of the applicant;

(b) complete street and mailing address of the applicant's principal office;

(c) the name of a regulatory contact who should be contacted regarding the application, and the address, direct telephone number, fax number and e-mail address of that person;

(d) the name and business address of all applicant's officers and directors, partners or other similar officials, and a statement that neither the applicant, nor any of its officers and directors, partners or other similar officials are currently in violation of, and within the past three years have not violated, any state or federal consumer protection laws or rules;

(e) a description of the applicant's experience, and the experience of each of its officers, directors or other officials in wholesale and retail electricity markets;

(f) a list of affiliates, if any, a corporate organization diagram, a description of each affiliate's activities and purpose;

(g) a statement that the applicant neither owns, holds, equips, maintains or operates any electric generation, transmission or distribution systems or facilities in the state of Montana;

(h) a demonstration that it has the capability to acquire energy, capacity and other generation-related ancillary services, transmission rights and interconnection arrangements sufficient to deliver firm, reliable electricity supply, including line losses on the distribution services provider's transmission and distribution system, to default service customers equivalent in quality to the power product described by western systems power pool, schedule c;

(i) a statement that the applicant agrees to comply with reliability criteria established by the North American electric reliability council and the western systems coordinating council and mid-continent area power pool, as applicable;

(j) a demonstration of creditworthiness through one of the following:

(i) a long term bond (or other senior debt) rating of at least BBB- or an equivalent rating as determined by Standard & Poor's or another recognized U.S. or Canadian debt rating service; and

(ii) proof of a security deposit payable to the distribution services provider as of commencement of service in an amount equal to the product of five dollars per megawatt-hour times the estimated annual megawatt-hours of electricity that the applicant will deliver to the default service customers of a distribution services provider if designated as a default supplier.   The security deposit must be updated six months after the date on which service is first provided and every six months thereafter using the average load for the period and a good faith estimate of the cost of emergency service.   Security deposits must be in the form of either a renewable surety bond issued by a major insurance company, or a guarantee with a guarantor possessing a credit rating of Baa2 or higher from Moody's or BBB or higher from Standard & Poor's, Fitch or Duff and Phelps.   The terms of the bond or guarantee must allow the commission to order the issuer to pay directly to the distribution services provider, up to the value of the bond or guarantee, any debts owed by the applicant due to its failure to satisfy its default supply obligations; and

(k) a demonstration that the applicant can execute an agreement with the distribution services provider for deliveries of default electric supply to the distribution services provider's service area(s) .

(2) The commission may waive one or more licensing requirements in part (1) of this rule if the applicant demonstrates good cause and the commission determines that waiving the requirement is in the public interest.

(3) The average time for commission action on an uncontested correctly completed application for a license to be eligible for default supplier designation is 45 days. The average time for commission action on a contested correctly completed application is up to 120 days.