SECURITY DEPOSIT
POLICY
SECURITY DEPOSIT
POLICY
POLICY
EFFECTIVE JANUARY 1, 2016
FPU's security deposit policy is designed to assess the credit risk associated with all applicants for new or continued utility service(s) while protecting the assets of our utility.
RESIDENTIAL SERVICE APPLICANTS
Standard Deposits: $300.00 for Electric service, $150.00 for Gas service, $100.00 for Water service - If allowed to run credit check, the deposit may be reduced as follows:
• In the event a customer has been disconnected for nonpayment within the past 24 months, he or she will automatically be considered to have substantial credit risk as outlined above, and the appropriate security deposit will be required when applying for service.
• In cases of hardship or residential service applicants, FPU may accept installment payments for security deposits. Applicants must justify the hardship. Management will evaluate each hardship case individually.
• The security deposit requirement remains in effect for the life of the account.
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New-service applicants who pose no credit risk will be charged no security deposit for each service.
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New-service applicants who pose minimal risk will be charged a security deposit of $150.00 for Electric service, $75.00 for Gas service, and $50.00 deposit for Water service.
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New-service applicants who pose substantial credit risk or who refuse to or cannot provide information to run a credit check will be charged a security deposit of $300.00 for Electric service, $150.00 for Gas service and $100.00 for Water service.
• In the event a customer has been disconnected for nonpayment within the past 24 months, he or she will automatically be considered to have substantial credit risk as outlined above, and the appropriate security deposit will be required when applying for service.
• In cases of hardship or residential service applicants, FPU may accept installment payments for security deposits. Applicants must justify the hardship. Management will evaluate each hardship case individually.
• The security deposit requirement remains in effect for the life of the account.
GENERAL SERVICE APPLICANTS
(Includes non-residential, commercial, and industrial)
• A security deposit of two average monthly utility bills will be required of any general service customer before service is supplied. The security deposit can be secured by cash, assignments on a CD or savings account, irrevocable letter of credit from an approved financial institution, or a utility payment bond. The security deposit will be applied by FPU against the final bill.
• The average monthly utility bill for the purpose of this policy means the highest of:
1. The average monthly utility bill for service location based on historical billing data for the previous 12 months.
2. The average monthly utility bill calculated using utility load data.
• Upon written request by the customer, the security deposit requirement may be re-evaluated based on the most recent use. FPU will review the adequacy of the general service security deposit based on historical use and/or credit worthiness annually. The deposit will be increased if the account is not in good standing.
• Security deposits will not be required from any agencies of local, state, and federal governments with a rating of either "A2" from Moody's Investors Service or "A" from Standard and Poor's Rating Agency and whose accounts are in good standing upon annual review.
• A security deposit of two average monthly utility bills will be required of any general service customer before service is supplied. The security deposit can be secured by cash, assignments on a CD or savings account, irrevocable letter of credit from an approved financial institution, or a utility payment bond. The security deposit will be applied by FPU against the final bill.
• The average monthly utility bill for the purpose of this policy means the highest of:
1. The average monthly utility bill for service location based on historical billing data for the previous 12 months.
2. The average monthly utility bill calculated using utility load data.
• Upon written request by the customer, the security deposit requirement may be re-evaluated based on the most recent use. FPU will review the adequacy of the general service security deposit based on historical use and/or credit worthiness annually. The deposit will be increased if the account is not in good standing.
• Security deposits will not be required from any agencies of local, state, and federal governments with a rating of either "A2" from Moody's Investors Service or "A" from Standard and Poor's Rating Agency and whose accounts are in good standing upon annual review.
INTEREST EARNED ON CASH SECURITY DEPOSITS
• After the security deposit is paid in full, interest will accrue annually on a cash security deposit held longer than twelve months. The interest rate earned on the security deposit shall be equal to the annual rate of interest earned by FPU's primary checking account as of July 1 of each year. Interest accumulated on cash security deposits shall be credited to the customer's account once per year.
• Upon written request by the customer, the interest on security deposits may be reviewed. The total security deposit, including interest accrued, will be credited to the customer's unpaid balance upon termination of service.
• A security deposit can be transferred from one service address to another if both accounts are in the same customer's name.
• Customers that enroll in FPU's pre-pay program (once implemented by the utility) will not be required to provide a security deposit.
• Upon written request by the customer, the interest on security deposits may be reviewed. The total security deposit, including interest accrued, will be credited to the customer's unpaid balance upon termination of service.
• A security deposit can be transferred from one service address to another if both accounts are in the same customer's name.
• Customers that enroll in FPU's pre-pay program (once implemented by the utility) will not be required to provide a security deposit.