I am trying to distinguish these two types of entities both practically (what  are we able to negotiate) and legally (what do we really need in our  Schedule).
I am also interested in your experiences in dealing with these  parties.
ENA's form of "municipal" Schedule ("the ENA Schedule") was essentially  taken from the 1992 ISDA U.S. Municipal Counterparty Schedule ("the ISDA  Schedule").
In addition to other provisions, the ISDA Schedule (1) adds reps  designed to avoid "an Orange County" type meltdown and (2) incorporates the  concept of "Incipient Illegality" (which occurs before the Termination Event  of  Illegality).
The "Incipient Illegality" concept is used  in Section  2(a)(iii) (obligations) as well as the Section 3 (reps) of the ISDA  Schedule:   the concept is added to the Section 3(b) rep ("..absence of Event  of Default, Potential Event of Default, Incipient Illegality...), and for  purposes of notifying the other party of its occurrence.
Interestingly  enough, the ENA Schedule does not include the Section 3(b) rep change.
I  think we need to add this change to ENA's Schedule.
With respect to IOUs, we need to clarify our position on "Regulatory  Development" (which is actually a watered-down "Incipient Illegality"  concept).
If such an event occurs, ENA should be advised of the event  (Notice).
But, does ENA really want the ability to terminate trades at  mid-market ("Additional Termination Event") or simply to have this event  included as part of a Section 3(b) rep such that the occurrence of the event  merely triggers an Event of Default at ENA's side of the curve (for breach of  the Section 3(b) rep)?
I have found that negotiating with IOUs for the "Notice" provision can be  difficult.
Extracting the Additional Termination Event is tough.
Arguing  for a Section 3(b) change may be easier (and would mirror the municipal  format).
I think ENA really needs the ability to decide when to halt trading  with a counterparty experiencing a Regulatory Development (which we may only  learn about through notice from the counterparty).
Thus, I recommend that  for IOUs, we add a notice provision and Section 3(b) rep change incorporating  our latest definition of "Regulatory Development."
But we really have to  negotiate for this protection.
Otherwise, why bother to include this  additional language?
What do you think?

Municipals (including municipal utilities and other regulated  entities) vs. investor owned utilities ("IOUs")