1. (a) Conditions. A utility may only require a new deposit or an increase in the amount of a deposit from a customer for the following reasons:

   1. (1) The customer failed to pay a bill before the close of business on the shut-off date within the last twelve (12) months;
   2. (2) The customer gave the utility two (2) or more checks that were returned unpaid for reasons other than bank error in the last twelve (12) months;

   3. (3) The customer did not pay bills:

      1. (A) By the close of business on the due date two (2) times in a row; or
      2. (B) Any three (3) times in the last twelve (12) months;
   4. (4) During the last twenty-four (24) months, the customer misrepresented his or her identity or other facts relevant to the conditions under which the customer obtained or continued utility service;
   5. (5) The customer used service without authorization, tampered with utility equipment, or inflicted damage to utility equipment during the last two (2) years;

   6. (6)

      1. (A) The customer used more service than the estimate on which the utility based the deposit.
      2. (B) The utility may not charge any additional deposit under subdivision (6)(A) of this section after the first twelve (12) months of service unless the customer:

2. (i) Moves the service to a new location; or

   1. (ii) Expands the business or scope of operation at the original location; or

   2. (7)

      1. (A) In accordance with 11 U.S.C. § 366 of the United States Bankruptcy Code, the utility may require a customer to furnish adequate assurance of payment in the form of a deposit or other security.
      2. (B) This deposit may be in addition to all other deposits posted with the utility before the bankruptcy filing.

3. (b) Amounts.

   1. (1) When a utility charges a new or additional deposit, the total amount on deposit at any time shall not be more than the total of the customer’s two (2) highest bills during the last twelve (12) months.

   2. (2) Exceptions.

      1. (A) Deposit for fraud or tampering. If the reason for requiring a deposit is unauthorized use of service or tampering with utility equipment, the total amount on deposit with the utility shall not be more than the estimated bill for six (6) average billing periods plus the cost of potential damage to utility equipment.

      2. (B) Bankruptcy. See subdivision (a)(7) of this section.

         1. (c) Written notice. A utility shall explain in writing:
   3. (1) The reason for charging any new or additional deposit;
   4. (2) The amount of the deposit;
   5. (3) When the deposit must be paid; and

   6. (4) The consequences of failing to pay the additional deposit.

      1. (d) Payment procedures. Except for deposits under subdivision (a)(5) of this section, a customer may pay one-half (1/2) of any new or additional deposit in equal installments with the next two (2) bills.
4. (e) Receipts. Utilities shall give customers receipts for their deposits upon customer request.

Codification Notes: This section was promulgated as Rule 4.02 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.