1. Resolution — Anaheim City Council, September 29, 2026

1 RESOLUTION NO. 2026-_______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ANAHEIM ADOPTING NEW RULE NO. 27 OF THE ELECTRIC

RATES, RULES AND REGULATIONS, WHICH DOES NOT

INCREASE RATES OR FEES, AND MAKING

DETERMINATIONS UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (“CEQA”).

WHEREAS, the City of Anaheim (“Anaheim”), through its Public Utilities Department (“APU”), owns and operates an electric generation and distribution system for the furnishing of electricity to residents and businesses of Anaheim and has adopted Electric Rates, Rules and Regulations governing the terms and conditions under which APU sells and distributes such electricity; and
WHEREAS, APU is a publicly owned utility that seeks to maintain reliable, affordable service for its ratepayers by ensuring that material costs and financial risks attributable to serving new large-scale customers are appropriately borne or secured by those customers and are not shifted to other customers; and
WHEREAS, the rapid growth of large-scale data center development and similar major industrial-scale electric load customers present unique financial and operational characteristics that warrant a clear, objective, and narrowly tailored framework for evaluating and serving such customers; and
WHEREAS, in support of the foregoing, APU staff developed and recommends new Rule No. 27 Financial Assurance Standards for Large Electric Load (“New Rule”) of the Electric Rates, Rules and Regulations, as set forth in Attachment A, establishing financial assurance standards applicable to a narrow category of electric load customers; and WHEREAS, at its meeting of August 26, 2026, the Public Utilities Board reviewed the proposed New Rule, which is on file with the Office of the City Clerk, and recommended that the City Council adopt the New Rule and determine that the action is not subject to CEQA; and WHEREAS, the City Council has considered the Public Utilities Board’s recommendation, the staff report, and all accompanying evidence and desires to adopt the New Rule and make the environmental determinations set forth in this Resolution.

NOW, THEREFORE, BE IT RESOLVED by the City Council as follows:

1. The City Council finds and determines that the adoption of this Resolution and the proposed New Rule are not subject to CEQA because the action does not constitute a “project” within the meaning of CEQA Guidelines (Cal. Code Regs., tit. 14, ch. 3) sections 15060(c)(2)–(3) and 15378 in that it constitutes a regulatory and administrative action and general procedure making establishing standards and terms that do not approve, commit Anaheim to, or result in any physical changes to the environment, and that, to the extent the action could be considered a “project,” it is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3). 2 2. The City Council hereby adopts new Rule No. 27 of the Electric Rates, Rules and Regulations in the form attached hereto as Attachment A, which is incorporated herein by this reference.

3. The New Rule adopted herein shall become effective October 1, 2026.

4. The Anaheim Public Utilities General Manager is hereby authorized and directed to prepare, promulgate, publish, and implement Rule No. 27 of the Electric Rates, Rules and Regulations as set forth herein.

THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Anaheim this _____ day of ______________, 2026, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

CITY OF ANAHEIM
By: __________________________________

MAYOR OF THE CITY OF ANAHEIM
ATTEST:
_____________________________________

CITY CLERK OF THE CITY OF ANAHEIM
159151
3 Attachment A
Electric Rates, Rules and Regulations
Rule No. 27
Effective October 1, 2026

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.1
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
A. PURPOSE
This Rule establishes requirements for new Customers, and existing Customers requesting Material Load Expansions, whose service may expose the Utility and its other Customers to material financial risk from Stranded Costs, cross-subsidization, nonpayment, or other costs and risks associated with large incremental loads. This Rule is intended to: (a) provide transparent and standardized methodologies for evaluating such costs and risks and determining Financial Assurance; (b) ensure that requirements imposed under this Rule are reasonably related and proportionate to the Utility’s documented costs and risks attributable to the requested service; and (c) require Applicants and Customers subject to this Rule to assume and adequately secure their Customer Obligations.

An Applicant or Customer subject to this Rule shall pay, fund, reimburse, or secure all Customer Obligations attributable to its requested service. The Utility shall have no obligation to incur any material cost, undertake or maintain any material commitment, reserve capacity, construct Added Facilities, or commence or continue service unless the Applicant or Customer has first provided the information, funding, Financial Assurance, and other protections that the General Manager reasonably determines, based on the Cost and Risk Analysis, are sufficient to protect the Utility and its other Customers from the corresponding costs and risks.

B. DEFINITIONS
In this Rule, the following terms have the meanings given below. Capitalized terms used but not defined in this Rule shall have the meanings given in Rule No. 1 or elsewhere in the Electric Rates, Rules and Regulations. “Added Facilities” means, for this Rule, facilities required or materially enlarged, extended, accelerated, or modified, including Preferred/Emergency Service, because of the requested service, together with associated engineering, permitting, property rights, third-party work, and closeout work attributable to such facilities.

Where a facility also provides a material general-system benefit or replaces or accelerates a facility the Utility otherwise would have eventually constructed, Added Facilities include only the incremental or otherwise reasonably allocable portion attributable to the requested service. “Contracted Demand” means the maximum electric demand, expressed in megawatts (MW), that the Utility approves and is prepared to make available to the Customer at the Points of Delivery and for the periods established in an applicable Determination, subject to the Customer’s continuing compliance with this Rule and applicable Determinations.
“Cost and Risk Analysis” means a written analysis prepared by or at the direction of the Utility using methodologies approved by the General Manager, which at a minimum shall: (a) identify the costs and material capital, procurement, power-supply, capacity, transmission, ancillary-service, or other commitments attributable to the requested service; (b) specify known forecast periods, material assumptions, and data sources; (c) quantify actual or potential Customer Obligations, including potential Stranded Costs and nonpayment exposure; (d) evaluate the Applicant or Customer’s creditworthiness using standardized criteria; and (e) evaluate the appropriate form, amount, and duration of Financial Assurance. “Credit Support” means the security required under Section G.3.

Attachment A

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.2
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
“Customer Obligations” means all amounts and financial liabilities that an Applicant or Customer is required to pay, fund, reimburse, or otherwise satisfy under this Rule, including Stranded Costs and documented costs of evaluation, Added Facilities, electric service under applicable Rate Schedules and Rate Charges, Trustee and collateral administration, enforcement, and project or service closeout. “Determination” means an administrative written determination issued by the General Manager applying this Rule to a particular Applicant, Customer, or stage of service, including determinations concerning Added Facilities, Contracted Demand, load-development requirements, Customer Obligations, Financial Assurance, conditions precedent to applicable Utility actions, and other implementation matters authorized by this Rule. A Determination is not a negotiated agreement or contract between the Utility and the Applicant or Customer. “Financial Assurance” means the Prepayment Account and Credit Support required under Section G, collectively.
“Load Factor” means, for this Rule, the Customer’s projected average demand over a twelve-month period divided by the Customer’s projected peak demand during the same period, expressed as a percentage. “Material Load Expansion” means a request by an existing Customer for additional Contracted Demand where the incremental demand satisfies the applicability criteria in Section C. This Rule applies only to the incremental portion of such demand, and the Customer’s preexisting service remains subject to the otherwise applicable Electric Rates, Rules and Regulations.
“Material Load Reduction” means a material delay, reduction, or cessation in the Customer’s load below its Contracted Demand or an approved load-development schedule that the General Manager reasonably determines causes or materially increases potential Stranded Costs or other Customer Obligations, including failure to commence or increase load as anticipated, temporary or permanent curtailment or shutdown, termination of service, relocation, or abandonment. A reduction or cessation resulting solely from a Utilitydirected curtailment does not constitute a Material Load Reduction, unless the curtailment results from the Customer’s default or noncompliance or is undertaken in response to a directive, instruction, or formal reliability request of an Independent System Operator or other applicable reliability authority. “Prepayment Account” means the account established and maintained under Section G.2. “Stranded Costs” means the Utility’s documented costs, obligations, or liabilities incurred or maintained in reliance on the Customer’s Contracted Demand, approved load-development schedule, or other service requirements established in a Determination that remain unrecovered following a Material Load Reduction, default, cancellation, or termination, to the extent they cannot be avoided, recovered, or otherwise mitigated through commercially reasonable efforts. Stranded Costs may include unrecovered costs or liabilities associated with procurement, power supply, capacity, transmission, ancillary services, cancellation, unwinding, demobilization, or closeout.
“Trustee” means a financial institution designated by the Utility to administer Financial Assurance under this Rule.
“Trustee Agreement” means the agreement between the Utility and the Trustee governing the Trustee’s administration of Financial Assurance under this Rule.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.3
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
C. APPLICABILITY AND AGGREGATION
This Rule applies to an Applicant for new electric service, and to an existing Customer requesting a Material Load Expansion, where the General Manager determines, based on a Cost and Risk Analysis, that all of the following criteria are met: (a) the requested Contracted Demand, or incremental Contracted Demand for a Material Load Expansion, is fifteen (15) megawatts or greater; (b) the projected Load Factor at sustained, fullscale operations is eighty percent (80%) or greater, without regard to a transient ramp-up, partial deployment, or other unrepresentative early-stage period; and (c) provision of the requested service requires the Utility to undertake or materially increase a capital, procurement, power-supply, renewable-energy, capacity, transmission, ancillary-service, or other commitment that, but for the requested service, the Utility would not have undertaken or increased.

Notwithstanding the foregoing criteria, the General Manager may preliminarily require compliance with this Rule where the General Manager reasonably determines in writing that the requested service may create material Customer Obligations, potential Stranded Costs, or nonpayment risk warranting the protections of this Rule. The General Manager shall confirm, modify, or withdraw that preliminary designation based on the Cost and Risk Analysis.

The General Manager may, based on a Cost and Risk Analysis, treat multiple facilities, accounts, meters, Points of Delivery, or successive requests for additional Contracted Demand as a single request where they: (a) share common ownership or control; (b) are operated as part of an integrated facility or business; (c) constitute phases of the same development; or (d) are otherwise structured or phased in a manner that would evade application of this Rule.

For a Material Load Expansion, this Rule applies only to the incremental portion of the Customer’s demand.

The Utility may nevertheless consider the Customer’s existing load, payment history, creditworthiness, and related obligations to the extent reasonably necessary to evaluate the costs and risks associated with the Material Load Expansion and determine appropriate Financial Assurance for Customer Obligations attributable to the incremental demand.

D. APPLICATION, EVALUATION, AND CONTINUING DISCLOSURE

1. Large-Load Application
An Applicant or Customer requesting service that reasonably may meet the criteria in Section C shall submit a large-load Application, in addition to any Application required by Rule No. 3, in a form prescribed by the Utility.

At a minimum, the Application shall include, as applicable: (a) the requested Contracted Demand, anticipated load profile, proposed load-development schedule, and requested service date; (b) the status and anticipated schedule of project development, including material milestones, site control, permits, and approvals; (c) the ownership and control of the Applicant or Customer and the proposed service location, including relevant parent companies and affiliates; and (d) financial, credit, and project-financing information reasonably necessary to evaluate the Applicant or Customer’s ability to satisfy its Customer Obligations.

The Applicant or Customer shall provide any additional technical, financial, operational, ownership, or project information reasonably requested by the Utility to evaluate the requested service and associated costs and risks.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.4
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager

2. Certification, Continuing Disclosure, and Utility Reliance The Applicant or Customer shall certify that all material information submitted in connection with the requested service is complete and accurate and shall promptly correct or supplement that information when applicable.

Throughout Application review, design, construction, and electric service, the Applicant or Customer shall: (a) provide financial, credit, load, operational, ownership, and project information reasonably requested by the Utility; and (b) promptly disclose any material change that may affect the requested service, Contracted Demand, load-development schedule, project viability, Customer Obligations, Financial Assurance, or the Utility’s evaluation of its costs and risks.

The Utility is entitled to rely on information provided by the Applicant or Customer when preparing or updating a Cost and Risk Analysis, issuing or revising a Determination, planning or constructing Added Facilities, establishing Contracted Demand or load-development requirements, undertaking commitments, and determining required funding or Financial Assurance.

A material inaccuracy, omission, or failure to provide required information or notice may result in revision or withdrawal of a Determination, adjustment of required funding or Financial Assurance, suspension or termination of Utility action, or exercise of any other remedy authorized by this Rule.

3. Cost and Risk Analysis
The Utility shall prepare or obtain a Cost and Risk Analysis before undertaking material costs or commitments in reliance on the requested service. The Utility may update the analysis whenever material circumstances affecting the requested service, Customer Obligations, the Applicant or Customer’s creditworthiness, or the Utility’s costs or risks have changed.

The Applicant or Customer shall provide information and cooperation reasonably necessary to complete or update the analysis. A Cost and Risk Analysis does not obligate the Utility to approve the requested service or undertake any cost or commitment.

4. Evaluation Advances
The Applicant or Customer shall advance the Utility’s estimated costs of processing and evaluating the Application, including the costs of preparing or updating the Cost and Risk Analysis and related engineering, technical, financial, administrative, consulting, or third-party review.

The Utility may require supplemental advances before incurring costs exceeding amounts previously advanced and may suspend or terminate its evaluation if required information or funding is not timely provided.

Amounts advanced under this Section shall be reconciled to the Utility’s documented actual costs. Any balance not required to satisfy or secure related Customer Obligations shall be returned after completion or termination of the evaluation.

Submission or evaluation of an Application, preparation of a Cost and Risk Analysis, or issuance of a preliminary Determination does not establish a queue position, reserve capacity, establish Contracted Demand, or otherwise obligate the Utility to provide service or undertake any cost or commitment.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.5
Anaheim, CA 92805
RULE NO. 27

1. Conditions to Utility Action
The Utility shall have no obligation to evaluate or continue processing an Application, design or construct Added Facilities, procure equipment, reserve capacity, undertake or maintain material commitments, establish or increase Contracted Demand, or commence or continue service unless the Applicant or Customer has satisfied the requirements applicable to that Utility action under this Rule, the Electric Rates, Rules and Regulations, and applicable Determinations.

Before taking any material action in reliance on the requested service, the Utility shall require the Applicant or Customer to provide the information, funding, Financial Assurance, acknowledgment, and other protections that the General Manager reasonably determines are necessary, based on the Cost and Risk Analysis, to protect the Utility and its other Customers from the corresponding costs and risks.

Satisfaction of requirements applicable to one Utility action does not obligate the Utility to take any later action or prevent the Utility from requiring additional protection before assuming additional or materially changed costs or risks.

2. Determinations
The General Manager may issue, revise, or supersede Determinations as reasonably necessary to apply this Rule to an Applicant, Customer, or stage of service. At a minimum, each material Determination shall: (a) identify the Utility action under consideration and the material facts and assumptions upon which the Utility relies; (b) identify the applicable requirements of this Rule, including any Added Facilities, Contracted Demand, loaddevelopment requirements, Customer Obligations, or Financial Assurance; (c) state the material conditions, amounts, deadlines, and Customer actions required before the Utility proceeds; and (d) be supported by the Cost and Risk Analysis and be reasonably proportional to the Utility’s documented costs and risks attributable to the requested service.

A Determination may be issued incrementally and revised based on new or corrected information, changed circumstances, updated costs or commitments, changes in creditworthiness, or other matters materially affecting the requested service or the Utility’s costs and risks. A Determination applies and implements this Rule and does not amend or create an exception to it. A Determination is not subject to negotiation or counterproposal by the Applicant or Customer, and an Applicant or Customer seeking revision of a Determination shall be limited to the reconsideration process in Section J.3.

3. Customer Acknowledgment
Before taking material action on a Determination, the General Manager shall require the Applicant or Customer to execute an acknowledgment of the Determination, confirming receipt and understanding of the Determination and the accuracy and completeness of material information supplied by the Applicant or Customer. Failure or refusal to execute an acknowledgment permits the Utility to decline, suspend, or terminate the corresponding Utility action but does not extinguish Customer Obligations already incurred.

The Applicant or Customer’s substantive obligations arise under this Rule and applicable Determinations. An acknowledgment does not constitute an amendment of this Rule or reduce or condition its protections.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.6
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager

4. Environmental Review
The Utility shall not approve or undertake an action constituting a commitment to a project unless and until all required environmental review has been completed under the California Environmental Quality Act and the authorized decision-making body has made all required environmental determinations.

Until completion of applicable environmental review, the Utility retains full discretion to approve, modify, or disapprove the proposed Added Facilities or, if applicable, service arrangement. Any preliminary Determination remains subject to modification or withdrawal as necessary to preserve that discretion and comply with applicable law.

F. ADDED FACILITIES AND STRANDED COSTS

1. Added Facilities Costs
The Customer shall pay one hundred percent (100%) of the documented costs of Added Facilities reasonably attributable or allocated to the requested service. The Customer shall fund such costs before the Utility incurs the corresponding cost or commitment. The Utility may require full or staged advances, reasonable contingencies, and supplemental funding as necessary to protect against documented actual costs, including cost changes and cancellation, demobilization, storage, removal, restoration, and closeout costs. Cost estimates do not limit the Customer’s responsibility for documented actual Added Facilities costs.

If required funding or Financial Assurance is not timely provided, the Utility may suspend or terminate design, procurement, construction, or other work and may cancel or modify associated commitments to the extent reasonably practicable.

2. Stranded Costs and Material Load Reduction
The Customer shall be responsible for all documented Stranded Costs attributable to the requested service. That responsibility applies following a Material Load Reduction regardless of its cause or whether the cause is within the Customer’s control, including delay; market or financing conditions; technological, operational, or regulatory changes; Customer equipment failure; changes in ownership or occupancy; loss of permits; force majeure affecting the Customer, or cessation of the Customer’s project or business.

A Material Load Reduction, cancellation of Contracted Demand, or discontinuance or termination of service does not release the Customer from Customer Obligations resulting from Utility commitments incurred or maintained in reliance on the Contracted Demand, approved load-development schedule, or other service requirements established in a Determination. The Customer shall maintain Financial Assurance for as long as the General Manager reasonably determines such Customer Obligations may remain outstanding.

3. Accounting, Mitigation, and Ownership
Amounts advanced or paid under this Section shall be reconciled to documented Customer Obligations. The Utility shall undertake commercially reasonable efforts to avoid or mitigate Stranded Costs and other Customer Obligations and shall credit the Customer for documented amounts avoided, recovered, resold, reassigned, or otherwise mitigated. The Utility is not required to assume that a speculative future recovery, resale, reassignment, or reuse will occur.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.7
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
The Utility shall not recover the same Customer Obligation more than once. Amounts not spent, committed, or reasonably retained to satisfy or secure unresolved Customer Obligations shall be returned following final accounting.

The Utility shall own and operate all Added Facilities that become part of its electric system in accordance with the Electric Rates, Rules and Regulations. Customer funding of Added Facilities does not create an ownership interest, preferential-service right, reservation of capacity, or other right in those facilities except as expressly provided by the Electric Rates, Rules and Regulations or an applicable Determination.

G. FINANCIAL ASSURANCE AND TRUSTEE ADMINISTRATION

1. Financial Assurance Required
The Customer shall establish and continuously maintain Financial Assurance, consisting of both a Prepayment Account and Credit Support, in the forms, amounts, and terms established by a Determination based on the Cost and Risk Analysis.

Financial Assurance shall provide a funded source for payment of electric service billed under applicable Rate Schedules, Rate Charges, and service-related costs and otherwise be sufficient to secure the Customer’s current and reasonably anticipated Customer Obligations and protect the Utility against nonpayment and Stranded Costs. The required Financial Assurance shall be established and adjusted through one or more Determinations and implemented through the Trustee Agreement and applicable Trustee and security documents. Projected service costs used to determine the required amount of Financial Assurance do not become due solely by reason of their inclusion in a Cost and Risk Analysis or Determination.

2. Prepayment Account
Before commencement of service, the Customer shall fund a Prepayment Account administered by the Trustee.

The Prepayment Account shall be the source of payment for electric service and service-related costs billed by the Utility.

The required balance shall equal the amount established by a Determination based on a Cost and Risk Analysis, which shall be not less than six (6) nor more than eighteen (18) months of projected costs of service, taking into account the Customer’s creditworthiness, the scale and duration of Utility commitments attributable to the Customer’s requested service, billing and replenishment cycles, and the complexity of the service arrangement.

Projected costs of service shall be calculated under applicable Rate Schedules and Rate Charges using the Customer’s Contracted Demand, approved load-development assumptions, and other relevant service conditions established in a Determination.

Upon receipt of each Utility bill, the Trustee shall pay the amount due from the Prepayment Account to the Utility in accordance with the Trustee Agreement. Amounts transferred to the Utility shall be applied dollar-fordollar to the corresponding Customer Obligation. Except to cure an insufficiency in the Prepayment Account or as otherwise required by the Utility, the Customer shall satisfy its bills through funding and replenishment of the Prepayment Account rather than by direct payment to the Utility.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.8
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
The Customer shall timely replenish amounts paid from the Prepayment Account so that the account is restored to its required balance within the period established in the applicable Determination or Trustee documents. If the Prepayment Account contains insufficient funds to pay an amount when due, the Customer remains responsible for the deficiency and shall provide the additional funds or payment required by the Utility.

Unapplied funds remain refundable security and do not constitute Utility revenue. Any interest accrued on the balance of the Prepayment Account shall belong to the Customer and shall not constitute Utility revenue.

3. Credit Support
In addition to the Prepayment Account, the Customer shall provide Credit Support in an amount established by the General Manager based on the Cost and Risk Analysis and stated, together with the applicable calculation methodology, in a Determination.

The amount shall be reasonably proportional to the Customer Obligations not adequately secured by the Prepayment Account, including Stranded Costs; unrecovered Added Facilities costs, if any; and cancellation, enforcement, and closeout obligations, after accounting for other reasonably available offsets and mitigation.

Credit Support shall remain effective for as long as the General Manager reasonably determines that the secured Customer Obligations may remain outstanding, regardless of whether active electric service continues.

Subject to the General Manager’s approval, Credit Support shall consist of one or more of the following: (a) an irrevocable standby letter of credit issued by a financial institution with long-term credit ratings of A- or better by S&P and A3 or better by Moody’s; (b) a surety bond issued by a surety rated A or better by A.M. Best and authorized to do business in California; (c) cash collateral deposited with the Trustee; or (d) an irrevocable parent or other affiliate guaranty from an entity with long-term issuer credit ratings of A- or better by S&P and A3 or better by Moody’s and liquid assets of at least ten (10) times the guaranteed amount.

The General Manager may prescribe additional generally applicable requirements concerning the form, issuer, guarantor, financial capacity, continuing financial reporting, duration, renewal, replacement, draw conditions, liquidity, enforceability, and continuing adequacy of Credit Support as reasonably necessary to protect the Utility.

4. Adjustment, Application, and Replenishment
The General Manager may adjust the required Financial Assurance when the Cost and Risk Analysis, as updated, shows a material change affecting the Customer’s load; Customer Obligations; creditworthiness; ownership or operations; or the sufficiency, liquidity, enforceability, or expiration of existing Financial Assurance.

The Customer shall provide any required increase, replenishment, replacement, or modification within the period specified in the applicable Determination or Trustee or security document. The General Manager may require expedited or immediate action where reasonably necessary to prevent expiration, impairment, or material under security.

In addition to ordinary payments from the Prepayment Account under subsection G.2, the Utility may retain, draw upon, convert, or apply Financial Assurance to any due, incurred, fixed, or otherwise recoverable

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.9
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager
Customer Obligation secured by it. The Utility may also draw upon or convert Credit Support to cash before expiration, termination, nonrenewal, or impairment if timely replacement is not provided.

A Material Load Reduction or discontinuance or termination of service may support retention, draw, or application of Financial Assurance regardless of whether the event constitutes a Customer default. Following any proper draw or application, the Customer shall timely replenish or replace the applicable Financial Assurance.

The Utility may require separate Financial Assurance for separate Customer Obligations or periods of exposure but shall not count or recover the same obligation more than once.

5. Trustee Agreement and Administration
The General Manager shall designate one or more qualified financial institutions to serve as Trustee and may replace or add Trustees as necessary. The Utility shall enter into a Trustee Agreement with each designated Trustee establishing the Trustee’s obligations to the Utility.

The Trustee shall administer the Customer’s Prepayment Account and any Credit Support assigned to it in accordance with this Rule, applicable Determinations, the Trustee Agreement, and applicable security documents. The Trustee Agreement shall provide for the Trustee’s timely payment from the Customer’s Prepayment Account to the Utility of amounts billed for electric service and service-related costs and establish applicable payment, replenishment, notice, and administrative procedures.

The Customer shall execute and continuously maintain an agreement with the Trustee, in a form approved by the Utility, governing funding and replenishment of the Prepayment Account; payment of Utility bills from the Prepayment Account; posting and maintenance of Credit Support, if administered by the Trustee; payment of Trustee costs, and related administrative obligations. The Customer shall bear all reasonable and documented costs attributable to the required Trustee and collateral arrangements.

Trustee and security documents shall implement, and shall not reduce, condition, or modify, the Customer’s substantive obligations under this Rule. The General Manager may approve Customer-specific modifications to the Customer’s agreement with the Trustee reasonably necessary to implement an arrangement only if the modifications do not reduce the Utility’s protections.

6. Final Accounting and Release
Termination or discontinuance of service does not require immediate release of Financial Assurance. The Utility may retain Financial Assurance until the General Manager reasonably determines that all secured Customer Obligations have been paid, quantified and adequately provided for, expired, canceled without remaining liability, mitigated, or otherwise resolved.

Following final accounting and satisfaction or resolution of all secured Customer Obligations, the Utility shall cause any remaining funds or security to be returned or released to the Customer.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.10
Anaheim, CA 92805
RULE NO. 27

1. Contracted Demand
Contracted Demand shall be established only through a Determination. Submission or evaluation of an Application, a Customer forecast, or a preliminary Determination does not reserve capacity or obligate the Utility to establish the requested Contracted Demand.

The Utility may establish, phase, or condition Contracted Demand based on available capacity, load development, system requirements, and the costs and risks identified in the Cost and Risk Analysis or an applicable Determination. The Utility may limit, suspend, reduce, or cancel Contracted Demand if the Customer fails to satisfy a material requirement applicable to the Contracted Demand or to the required funding or Financial Assurance, or other circumstances materially impair the Utility’s ability to provide the Contracted Demand or materially increase the Utility’s attributable costs or risks.

The Utility shall have no obligation to provide service above Contracted Demand and may establish and enforce reasonable operational or physical limitations necessary to maintain the Customer’s demand at or below Contracted Demand and protect the Utility’s system and other Customers.

Any request to establish or increase Contracted Demand is subject to Utility approval and may require an updated Application, Cost and Risk Analysis, Determination, funding, or Financial Assurance.

A reduction, suspension, or cancellation of Contracted Demand does not release the Customer from Customer Obligations resulting from Utility commitments incurred or maintained in reliance on the Contracted Demand, approved load-development schedule, or other service requirements established in a Determination.

2. Transfers and Changes of Control
The Customer shall not assign or transfer, directly or indirectly, its Application, Contracted Demand, rights under a Determination, or rights or obligations under this Rule without the Utility’s prior written approval.

The Customer shall provide advance written notice of any proposed material change in its direct or indirect ownership or control. The Utility may review any proposed or completed transfer or change of control to determine its effect on the Customer’s creditworthiness, operations, anticipated load, Customer Obligations, or Financial Assurance.

The Utility may condition approval or continued service upon: (a) the proposed successor’s written assumption and acknowledgment of applicable obligations; (b) satisfaction of applicable technical, credit, and service requirements; (c) establishment of replacement or additional Financial Assurance; (d) uninterrupted maintenance of Financial Assurance during the transition; and (e) other reasonable conditions necessary to preserve the Utility’s protections under this Rule.

Unless expressly released in writing by the Utility, the Customer and any guarantor remain responsible for obligations arising before the effective date of an approved transfer or change of control.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.11
Anaheim, CA 92805
RULE NO. 27

1. Events of Default
Each of the following by Customer constitutes a default under this Rule: (a) failure to timely pay, fund, reimburse, provide Financial Assurance, replenish, or otherwise satisfy a material Customer Obligation; (b) failure to provide required information, notice, executed acknowledgment, or otherwise to perform as required by this Rule, a Determination, the Customer’s agreement with the Trustee, or an applicable security document; (c) making a material misrepresentation or omission concerning the requested service, Customer load, project development, creditworthiness, ownership, operations, or Financial Assurance; (d) materially exceeding Contracted Demand without Utility authorization; (e) making an unauthorized assignment, transfer, or change of control; or (f) engaging in any other material violation of this Rule or an applicable Determination or security document.

Customer’s failure to satisfy a condition precedent to Utility action permits the Utility to decline, suspend, or terminate that action whether or not the failure independently constitutes a default. A Material Load Reduction may activate the Customer’s obligations and the Utility’s rights under Sections F and G regardless of whether it constitutes a default.

2. Remedies
Upon the Utility’s determination of a Customer default, or another event for which this Rule authorizes protective action, the Utility may, subject to applicable law: (a) suspend or terminate Application evaluation, design, procurement, construction, or other Utility work; (b) revise, suspend, or withdraw a Determination; (c) decline to establish, increase, reserve, or continue Contracted Demand; (d) cancel or modify equipment orders, construction activities, or other commitments to the extent reasonably practicable; (e) decline to commence service, impose or enforce load limitations, or suspend or discontinue service; (f) retain, draw upon, convert, apply, increase, or require replacement of Financial Assurance; (g) recover Customer Obligations, including documented Stranded Costs and cancellation, enforcement, collection, and closeout costs; and (h) exercise any other remedy available under the Electric Rates, Rules and Regulations, the Trustee Agreement, applicable security documents, or law.

Except where immediate action is reasonably necessary to protect system safety or reliability, prevent expiration or impairment of Financial Assurance, avoid additional material Customer Obligations, or comply with law, the Utility shall provide written notice of a default or deficiency and a reasonable opportunity to cure or respond before exercising the above remedies. Any discontinuance of service shall comply with Rule No. 11 and applicable law.

The Utility may condition restoration of processing, construction, Contracted Demand, or service upon cure of the default and provision of additional funding, Financial Assurance, or other protection that the General Manager reasonably determines necessary based on the circumstances. Remedies are cumulative and may be exercised separately or concurrently. No delay or failure to exercise a remedy constitutes a waiver.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.12
Anaheim, CA 92805
RULE NO. 27

1. Relationship to Rates and Other Rules
The requirements of this Rule are in addition to, and do not replace, the Electric Rates, Rules and Regulations otherwise applicable to the Applicant or Customer, including Rule No. 2 (Description of Service), Rule No. 3 (Application for Service), Rule No. 6 (Establishment and Reestablishment of Credit), Rule No. 7 (Deposits), Rule No. 11 (Discontinuance and Restoration of Service), Rule No. 15 (Line Extensions), and Rule No. 16 (Service Connections and Facilities on Customer’s Premises). Where this Rule differs from another generally applicable requirement, this Rule governs with respect to Applicants and Customers subject to it.

Electric service shall be billed under applicable Rate Schedules and Rate Charges. Nothing in this Rule, a Determination, acknowledgment, Trustee Agreement, Customer agreement with a Trustee, or security document establishes or modifies a Rate Schedule, Rate Charge, or other generally applicable fee or charge.

Advances, prepayments, and Financial Assurance required under this Rule constitute security for, or advances against, documented Customer Obligations and do not constitute Utility revenue except when properly applied to electric service bills or other Customer Obligations.

2. Administrative Authority
The General Manager may establish procedures; methodologies; forms, including Determinations, acknowledgments, Trustee documents, and security documents; and other administrative requirements reasonably necessary to implement this Rule.

The General Manager may exercise reasonable judgment and discretion in determining Customer Obligations, Contracted Demand, required funding, Financial Assurance, sequencing, and other Customer-specific requirements, provided that each material determination: (a) is consistent with this Rule and the Electric Rates, Rules and Regulations; (b) is supported by a Cost and Risk Analysis, as may be updated; (c) is reasonably proportional to the Utility’s documented costs and risks attributable to the requested service; and (d) does not shift material costs or risks attributable to the Applicant or Customer to the Utility or its other Customers.

3. Reconsideration and Equivalent Protection
An Applicant or Customer may request reconsideration of a Determination or a default or other General Manager determination based on a material factual or computational error, new or corrected information, changed circumstances, or a proposed alternative method of compliance. The General Manager may approve an alternative method only upon a written determination that it: (a) provides protection equal to or greater than that otherwise required; (b) does not materially increase the Utility’s costs or risks; (c) does not shift costs or risks to other Customers; and (d) is consistent with the purposes and requirements of this Rule.

A request for reconsideration does not stay a deadline or requirement, reserve capacity, establish Contracted Demand, or obligate the Utility to proceed unless the General Manager expressly determines otherwise in writing.

CITY OF ANAHEIM ELECTRIC RATES, RULES
Utilities Financial Services AND REGULATIONS
201 S. Anaheim Blvd. Page No. 3.27.13
Anaheim, CA 92805
RULE NO. 27

FINANCIAL ASSURANCE STANDARDS FOR LARGE ELECTRIC LOAD
ISSUED BY: Effective: [Date] by Resolution No.: [####] Dated: [Date] [Name] Superseding Resolution No.: N/A Dated: N/A
General Manager

4. Limitations on Authority and No Waiver
The General Manager shall not, through a procedure, methodology, form, Determination, acknowledgment, Trustee Agreement, security document, side letter, oral representation, or other administrative action taken under this Rule: (a) waive a material obligation established by this Rule; (b) accept funding or Financial Assurance that the General Manager determines is materially inadequate to protect the Utility; (c) limit the Customer’s responsibility below its documented Customer Obligations; (d) shift material costs or risks attributable to the Applicant or Customer to the Utility or its other Customers; (e) establish or modify a generally applicable electric rate, fee, or charge, including any Rate Schedule or Rate Charge; or (f) otherwise materially reduce the protections established by this Rule.

No Utility employee or representative may modify or waive a requirement of this Rule through an oral statement, informal communication, or course of conduct.

5. Survival
Customer Obligations and obligations relating to final accounting, mitigation, and closeout survive suspension, cancellation, discontinuance, or termination of the Application, Contracted Demand, or service to the extent necessary to satisfy or resolve them. The Customer shall continue to provide information and maintain Financial Assurance for as long as the General Manager reasonably determines necessary to identify, quantify, secure, satisfy, or resolve remaining Customer Obligations.
— END OF RULE NO. 27 —

Anaheim City CouncilSeptember 29, 2026

Anaheim City Council
September 29, 2026