1. (a) Conditions.

   1. (1) A utility may require a deposit from any applicant to guarantee payment for service, subject to the conditions in subdivisions (a)(2) and (3) of this section.

   2. (2) A utility may not require a deposit or other guaranty based upon:

      1. (A) Income;
      2. (B) Residential location;
      3. (C) Race;
      4. (D) Color;
      5. (E) Home ownership;
      6. (F) Creed;
      7. (G) Sex;
      8. (H) Marital status;
      9. (I) Age; or
      10. (J) National origin.

   3. (3) A utility shall not demand a deposit as a condition of service from an applicant for residential service unless one (1) or more of the following criteria apply:

      1. (A) The applicant cannot provide proof of a satisfactory payment history with the same kind of utility for the previous twelve (12) months;
      2. (B) The applicant has a past due, unpaid account for previous utility service with the utility that is not in dispute;
      3. (C) The applicant did not pay bills from the utility:

2. (i) By the close of business on the due date two (2) times in a row; or

   1. (ii) Any three (3) times in the last twelve (12) months;

      1. (D) The applicant gave the utility two (2) or more checks in payment for previous utility service within the most recent twelve-month period of service that were returned unpaid for reasons other than bank error;

      2. (E) The applicant’s service from the utility has been suspended during the last twenty-four (24) months for one (1) or more of the following reasons:

         1. (i) Nonpayment of any undisputed past due bill or bills;
         2. (ii) Misrepresentation of the applicant’s identity for the purpose of obtaining utility service;
         3. (iii) Failure to reimburse the utility for damages due to negligent or intentional acts of the customer; or
         4. (iv) Obtaining, diverting, or using service without the authorization or knowledge of the utility; or
      3. (F) Information provided by the applicant upon application for service or within the previous two-year period is materially false or materially misrepresentative of the applicant’s true status, and the misrepresentation is relevant to the conditions under which the applicant may obtain utility service.

3. (b) Amounts. Utilities shall determine the amount of a deposit as follows:

   1. (1)

      1. (A) The deposit shall not be more than two (2) average bills as defined in 23 CAR § 455-403 if payment for utility service is due after service begins.
      2. (B) Exception. A utility may receive from a landlord a deposit that shall not exceed the estimated bill for three (3) average billing periods;
   2. (2) The deposit shall not be more than one (1) average bill as defined in 23 CAR § 455-403 if payment for utility service is due before service begins;

   3. (3)

      1. (A) If a utility discovers that an applicant has used the utility’s service without authorization or tampered with the utility’s equipment, it may charge that applicant a total deposit of not more than six (6) average bills, plus the potential damage to utility equipment.
      2. (B) The utility may not charge this deposit if the customer has received more than two (2) years’ cumulative service since the utility discovered the unauthorized use or tampering;

   4. (4)

      1. (A) If the utility has proof of a misrepresentation to the utility by the applicant relevant to the conditions under which the applicant obtained utility service, it may charge that applicant a total deposit of not more than twice the maximum bill.
      2. (B) The utility may not charge this deposit if the customer has received more than two (2) years’ cumulative service since the utility discovered the misrepresentation;
   5. (5) In accordance with 11 U.S.C. § 366 of the United States Bankruptcy Code, the utility may require an applicant to furnish adequate assurance of payment in the form of a deposit or other security; and

   6. (6) If the applicant has previously left the utility’s service owing a bill and that bill is unpaid at the time of application, the utility may require a deposit equal to twice the maximum billing.

      1. (c) Payment procedures. Except for deposits under subdivision (b)(3) of this section, applicants shall be allowed to pay the deposit in two (2) installments:
   7. (1) One-half (1/2) of the deposit before receiving service; and

   8. (2) The remaining one-half (1/2) with the first bill.

      1. (d) Receipts. Utilities shall give customers receipts for their deposits upon customer request.

Codification Notes: This section was promulgated as Rule 4.01 of the General Service Rules prior to codification in the Code of Arkansas Rules. The United States Bankruptcy Code is codified as Title 11 of the United States Code.