Why do electric companies require a deposit

Filing a complaint against a utility company. There are different utility deposit rules for general customers and low-income customers. General customers The utility may ask for a deposit from a general customer or applicant if: The current customer has paid late four times in the past 12 months and has an undisputed past due balance for more than 30 days; The applicant has a low credit score; The applicant has a final unpaid bill; The applicant previously was disconnected for nonpayment of a bill for the same class and type of service; The utility company has evidence of the applicant or customer tampering with or changing the equipment; or There is evidence of Payment Avoidance by Location PAL.

Low-income customers The utility may not require a deposit from a low-income customer for Late payments and past due over 30 days, or Low credit scoring. Written notification for a deposit The utility company must request a deposit from the applicant or customer in writing. The notice must include the following: Reason for the deposit; Amount of the deposit; How the deposit is calculated; Payment requirements; Schedule of payments for the deposit; Date by which entire deposit must be paid; That the deposit amount can be adjusted if the annual charges for the customer substantially change; Refund policy; Interest policy; Deposit policy for qualified low-income households; How to demonstrate low-income qualifications; and Availability and contact information for the Commissioner's Consumer Services Division in the event of a dispute.

Getting a refund of your deposit from a utility company The utility company shall refund your deposit with interest, after 12 consecutive months if: You have fewer than four late payments; No disconnections for non-payment; No tampering; and No past due balance is owed at the time of the deposit refund. Last reviewed. Last revised.

Learn more. Signing up for public utilities after a shutoff. When a utility company may deny service. Reasons a utility company may shut off service. How to prevent a shut off by the utility company. If a deposit is required, it cannot be waived. Where can I pay my deposit? What forms of payment are accepted for deposits?

How long is a deposit kept? Deposits are kept as a security on all accounts for the life of the account. How soon will my service start after I pay the deposit? Will I get my deposit back if I move?

Why Was my Bill so High? Learn More. Need Help Understanding Your Bill? See Sample Bill. You also could contact your state or local consumer protection office to check on any additional rights under state law. You might have the following options:. Contact your state or local consumer protection office for current information on these protections. A budget billing plan lets you pay a flat charge each month for services.

Before you decide to accept a budget billing plan:. Get ideas and tools to help you manage your money at consumer. They can also have your service disconnected for not paying and need it to reconnect or if a prior customer who owes a balance lives at that address along with you.

Many don't know that your utility payment history is actually part of your overall credit score. Yes, the credit score that allows you to rent an apartment, buy a car and eventually, buy a house. The utility company will pull your credit history, including your record of paying for utilities at any previous residences or your overall payment history. Paying your utility bills on time is essential. For example, if you're trying to open a water utility account, they'll look at your payment history and require you to pay a water deposit upfront to protect themselves from non-payment.

To get back your utility deposit, paying on time is critical. However, if you miss payments or do not make payments on time, the deposit will be applied toward the discrepancy. Depending on your state, utility companies can require you to pay a security deposit after several collection notices and disconnect your service. If strapped for money, contact your utility company and let them know that you're currently having a difficult time paying and if they could put you on a payment plan.

Also, when trying to lower your bill, you can also look at your usage. Little changes can amount to significant savings, so start with these five changes:.