Electricity and Renewables
Most energy companies posting financial assurance are using letters of credit or cash deposits, when instead they could be utilizing surety bonds. We are an independent surety bond agency specializing in renewable energy financial assurance, with direct access to the carriers that underwrite these risks.
If you need a bond and you operate in the energy sector, talk to a surety advisor today.
Who we work with
We work with solar developers, onshore and offshore wind developers, battery energy storage (BESS) developers, EPC contractors, transmission companies, wholesale power marketers and energy traders, companies with power purchase agreement obligations, conventional and pumped hydro operators, and organizations securing electricity delivery obligations for data centers.
If your bond requirement involves FERC, BOEM, an ISO or RTO, a state energy agency, or a county government with a decommissioning ordinance, we can help.
ISO and RTO market participant bonds
Wholesale electricity market operators require participants to post financial assurance as a condition of market access. Surety bonds are an accepted form of that financial assurance, and for most energy companies they’re a significantly better option than the cash deposits or letters of credit their current setup relies on.
A surety bond doesn’t restrict cash. It doesn’t draw on your line of credit. It doesn’t show up as a liability on your balance sheet. For companies with large or growing market participation obligations, the cost-of-capital difference is real and material.
ERCOT, NYISO, and PJM market participant bonds
ERCOT, NYISO, and PJM explicitly accept surety bonds in lieu of cash collateral deposits for market participant financial assurance. If your company participates in wholesale electricity markets, that’s a direct cost-of-capital advantage most energy companies still aren’t using.
We place market participant bonds for generators, load-serving entities, power marketers, and other wholesale market participants. If you’re currently posting cash or relying on an LC for your financial assurance, let’s discuss how surety bonds can be a better alternative.
Market participant bonds across other ISOs and RTOs
We also place surety-backed letters of credit for CAISO, MISO, SPP, ISO-NE, and other organized wholesale markets. Each ISO and RTO has its own credit requirements and collateral acceptance rules. We know the differences and we know the carriers that write these bonds.
If your company participates in multiple markets, we can structure a bond program that covers your full market footprint without duplicating effort or cost.
Power purchase agreement bonds
Energy producers are increasingly required to post financial guarantees for their power purchase agreements. This is a growing requirement, particularly as large electricity consumers like data centers and industrial users lock in long-term supply contracts and require performance security from their counterparties.
These guarantees can be structured as traditional surety bonds or, where the obligee requires it, as surety-backed letters of credit. We place both.
Surety-backed letters of credit
When an obligee requires true on-demand payment language (without the defense options a surety traditionally holds), a surety bond won’t satisfy their requirement. That’s where a surety-backed letter of credit comes in. It combines the security obligees need with the financial advantages of surety.
A surety-backed LC gives the obligee the right to draw funds on demand, similar to a bank-issued letter of credit. But instead of requiring you to restrict cash l or draw on your line of credit, the surety carrier backs the instrument. No cash is tied up and no banking capacity is consumed.
For energy companies posting financial guarantees on power purchase agreements, the difference in cost of capital can be meaningful. An obligee gets their on-demand security. You get the liquidity advantage of surety.
We place surety-backed letters of credit for power purchase agreement obligations, transmission agreements, market participant requirements, and other financial assurance needs where the obligee specifically requires on-demand payment language. If you’re currently using a bank-issued LC and want to understand whether a surety-backed structure makes sense for your situation, read our guide on Why a Surety Bond Is Better Than a Letter of Credit and reach out to discuss your program.
Solar and wind decommissioning bonds
Solar decommissioning is the fastest-growing bond requirement in the renewable energy space. County ordinances are proliferating across Colorado, Wyoming, Nevada, and Arizona. State agencies are tightening their requirements. Landowners are building decommissioning security into their ground lease terms. The regulatory landscape is still evolving, but the direction is clear – and developers who aren’t paying attention are getting caught off guard by bond requirements they didn’t anticipate.
Bond amounts for solar and wind decommissioning are driven by independent cost estimates, and those estimates vary significantly by jurisdiction. What a county in Colorado requires looks different from what a county in Nevada requires. An agency that tracks these ordinances closely can help developers anticipate requirements early, avoid over-reserving, and structure the bond program correctly before the obligee makes a demand.
Solar decommissioning bonds
Solar decommissioning bonds guarantee that a solar project owner will remove panels, racking, and associated infrastructure and restore the site at the end of the project’s useful life. County governments, state agencies, and landowners can all be obligees depending on the project’s location and the terms of its permits and leases.
We place solar decommissioning bonds across Colorado, Wyoming, Nevada, Arizona, and other states where county-level ordinances have proliferated. If you’re in the permitting or land acquisition phase of a project, please call us to discuss the decommissioning security you’ll be required to carry.
Wind farm decommissioning bonds
Wind turbine decommissioning is a significant undertaking. The per-turbine removal cost estimates that drive bond amounts are substantial, and the requirements vary between state agencies, county governments, and individual landowners. Some projects carry obligations to all three.
We place decommissioning bonds for onshore wind projects across the Mountain West and nationally. If you’re working with a landowner or county that has specific bond requirements, we can help you understand what the obligee will actually require and how to structure the bond efficiently.
Battery storage and BESS decommissioning bonds
Battery energy storage projects – standalone and co-located with solar or wind – are increasingly subject to their own decommissioning bond requirements. As the BESS market has grown, regulators and landowners have added decommissioning security requirements that didn’t exist a few years ago.
We place decommissioning bonds for utility-scale battery storage projects, including co-located solar-plus-storage developments where the decommissioning obligations for both assets need to be addressed.
BOEM offshore wind financial assurance
The Bureau of Ocean Energy Management (BOEM) requires financial assurance for offshore wind lease areas, covering decommissioning and construction obligations. Bond amounts for offshore wind projects can be significant, and the surety market capacity for these bonds is limited. Not every carrier writes offshore wind financial assurance, and not every agency has the carrier relationships to place them.
We place BOEM offshore wind financial assurance bonds and work with the carriers that have appetite for this risk. If you’re developing an offshore wind project and need financial assurance for your BOEM lease obligations, contact us early on in the process.
Transmission and interconnection bonds
The build-out of the transmission grid is accelerating, driven by renewable energy development and the growing demand from data centers and industrial users. Transmission developers, EPC contractors, and companies securing interconnection rights all have bond requirements tied to their projects and agreements.
We place performance and payment bonds for transmission construction projects, right-of-way bonds for easements across private and public lands, and interconnection agreement bonds required by utilities and ISOs/RTOs as a condition of transmission access. If your project involves a grid connection or a transmission build, we can cover the surety requirements from permitting through construction.
Hydropower and FERC-regulated bonds
The Federal Energy Regulatory Commission (FERC) is the primary federal obligee for hydropower projects. Whether you operate a conventional hydro facility, a pumped storage project, or a project undergoing relicensing, FERC-required financial assurance is part of your compliance obligations.
We place bonds for conventional hydro operators, pumped storage developers, and projects at every stage of the FERC licensing and relicensing process.
Hydroelectric license bonds
FERC requires licensed hydroelectric projects to carry hydroelectric license bonds as a condition of their operating license. These bonds guarantee compliance with the terms and conditions of the FERC license – including environmental, operational, and public safety requirements.
If you operate a licensed hydro project or are in the process of obtaining a FERC license, we can place the required financial assurance and help you understand exactly what the bond needs to cover.
Dam safety financial assurance
Depending on project size and jurisdiction, dam safety financial assurance may be required in addition to or alongside the hydroelectric license bond. State dam safety programs have their own requirements that can overlap with or supplement FERC obligations.
We work with operators to identify the full scope of their financial assurance obligations – federal and state – and structure the bond program to satisfy all obligees without unnecessary duplication.
Pumped storage project bonds
Pumped hydro storage projects are FERC-licensed and typically carry long development timelines. Financial assurance requirements apply during both the construction phase and the operational phase of the project. Bond amounts can be substantial given the scale of these projects.
We place bonds for pumped storage developers from the early development stage through construction and into operations. If you’re working through the FERC licensing process for a pumped storage project, we can help you plan the bond program before the requirements crystallize.
FERC relicensing bonds
Conventional hydro projects operating under FERC licenses are subject to periodic relicensing. The relicensing process can impose new or modified financial assurance requirements depending on what changes in the license terms.
We work with operators going through FERC relicensing to understand the updated bond requirements and ensure the financial assurance program is structured correctly for the new license period.
Surety bonds vs. letters of credit for energy companies
The energy industry has a long history of defaulting to letters of credit and cash deposits for financial assurance – not because they’re the best tool, but because surety wasn’t well understood as an option, or the right agency wasn’t available to place it.
A letter of credit is a demand instrument. The holder can draw it down at any time, for any reason, without having to prove you failed to meet your obligations. It typically requires restricted cash or a draw on your existing line of credit as collateral, which directly impacts your liquidity and your balance sheet. A surety bond, at a comparable cost, requires no collateral and it stays off your balance sheet.
Where an obligee specifically requires a letter of credit and won’t accept a bond, a surety-backed letter of credit may be the right solution. We place these instruments as well. The principal gets the on-demand payment language the obligee requires, without tying up cash or reducing banking capacity.
Why energy companies work with Evergreen Surety
We do surety only. No insurance products, no competing priorities. That focus means the people you’re working with have spent their careers supporting companies with needs like yours.
Very few surety agencies have built dedicated knowledge of ISO/RTO market participant bonds, FERC financial assurance requirements, BOEM offshore wind obligations, or the county-level solar decommissioning ordinance landscape. It’s a core part of what we do, not a side service.
We work alongside your CPAs, bankers, and attorneys – not around them. Bonds don’t exist in isolation from the rest of your financial picture, and we don’t pretend they do. When a bond placement requires us to coordinate with your lender or your legal team, we do that as a matter of course.
And when a bond is hard to place,we don’t stop at the first underwriter. We have carrier relationships specifically for complex energy risks with underwriter relationships throughout the country.
Get your bond program started
If you have a bond requirement and you’re not sure where to start, please call us. Or, more commonly, if you’re currently using letters of credit and want to understand whether surety makes sense for your program, we would love to help.
Call Eddie Maxfield at 720-492-9258 or email him at emaxfield@evergreensurety.com