307 DEPOSITS

307.1 A utility shall not require a cash deposit or guarantee from a person who has never been a customer of the utility.307.2 A utility shall not require a cash deposit or guarantee as a condition of new service to a person who has been a customer of a utility before, except under the following circumstances:- (a) The service of the customer has been terminated for nonpayment of a delinquent account not in dispute within the previous twelve (12) months;

- (b) The customer has in an unauthorized manner interfered with or diverted the service of the utility situated or delivered on or about the customer's premises within the twelve (12) months immediately preceding the customer's request for new service; Provided, that the following requirements are met:

- (1) The customer's service was last terminated for this reason and that the utility had so notified the customer in writing to this effect; and

- (2) The customer either did not file a complaint with the Commission regarding the termination; or if a complaint was filed, final action was taken thereon unfavorable to the customer;

- (c) The customer's account has been delinquent for an excess of forty-five (45) days at least three (3) times within the previous twelve (12) months; or

- (d) The customer has an outstanding balance due the utility for utility services. In any event, provision of new service may be conditioned upon payment of the outstanding balance.307.3 When a deposit or guarantee is required as a condition of new service to a former customer, he or she shall be notified in writing of the reason therefor, the amount of deposit required, and that it may be paid in installments.307.4 A utility shall not require a cash deposit or guarantee as a condition of continued service to a customer, except under the following circumstances:- (a) Utility service at the customer's residence has been interfered with or diverted in an unauthorized manner within the previous twelve (12) months; or

- (b) The customer's account has been delinquent for an excess of forty-five (45) days at least three (3) times within the previous twelve (12) months.307.5 When a deposit or guarantee is required of a customer with service connected, the customer shall be notified in writing of the reason therefor, the amount of deposit required, the date due (not less than fourteen (14) days from the date of the first written notice), and that it may be paid in installments.307.6 A utility shall not require a cash deposit or guarantee as a condition of new or continued utility service on the basis of credit bureau rating, income level, home ownership, residence location, race, color, creed, sex, age, national origin or any other criterion except those stated in this chapter.307.7 No deposit for utility service shall exceed the lesser of one hundred dollars (\$100) or twice the estimated maximum monthly bill of the customer over twelve (12) months. If the deposit

requirement is thirty-five dollars ($35) or more the deposit may be paid in a minimum of three equal monthly installments with the first installment due prior to reconnection.

307.8 Each utility shall be liable for interest on deposits held from the date the deposit is made until the date the deposit has been refunded or until an effort has been made to refund the deposit. Each utility shall pay simple interest on deposits with the rate being established not later than January 15th of each year, equal to the average annual yields of one year Treasury bills for September, October, and November of the preceding year.

307.9 Upon termination of service, the deposit with accrued interest shall be credited to any outstanding final bill and any remaining balance shall be returned to the customer.

307.10 A deposit and accrued interest shall be refunded promptly by the utility upon satisfactory payment by the customer of all proper charges for utility service for twelve (12) successive months in the case of a gas or electric customer or nine (9) successive months in the case of a telephone customer. Payment shall be satisfactory if the customer's account has not been terminated involuntarily or the customer's account has not been delinquent for an excess of forty-five (45) days at least three (3) times within the previous twelve (12) months. The utility may withhold return of deposit funds pending resolution of any dispute.

307.11 A utility shall maintain a record of all deposits, showing the customer's name and address or other identifying data, the amount of the deposit, the date it was paid, and the interest earned and paid thereon.

307.12 Each customer posting a deposit shall promptly receive a receipt containing, at a minimum the following information:

(a) The customer's name;

(b) The date of payment;

(c) The amount of payment; and

(d) Statement of the terms and conditions applicable to deposits.

307.13 When a customer is entitled to a return of a deposit it shall be paid upon presentation of proper identification.

307.14 In lieu of a cash deposit a utility may accept a written guarantee of payment from a responsible party. A responsible party shall include any customer of the utility whose account has not been delinquent during the preceding twelve (12) months.

307.15 The utility shall not require a written payment guarantee from any customer ready, willing and able to make a deposit as authorized by this chapter.

307.16 A guarantee shall be in writing on a form approved by the Commission and shall contain the following provisions and conditions unless otherwise agreed to by the utility and guarantor:

(a) That it is for an initial term of one (1) year;

(b) That the guarantor agrees to pay the utility within ten (10) days of demand the balance outstanding in the guaranteed account upon termination of service to the account, up to a maximum equal to the deposit which might have been required. The guarantor shall be liable only for amounts accruing to the account of the customer during the term of the guarantee;

(c) That, upon failure of the guarantor to satisfy a written demand within ten (10) days, the utility shall include the amount in the guarantor's next monthly billing. In such event, the amount transferred to the guarantor's bill shall be considered to have been incurred in providing service to the guarantor. The guarantor shall have the same right to challenge an account balance as is enjoyed by the customer;

(d) That, notwithstanding the terms of such guarantee, the guarantee agreement shall terminate upon satisfactory payment by the customer of all proper charges for utility service for a period of twelve (12) successive months in the case of a gas or electric customer or nine (9) successive months in the case of a residential telephone customer. Payment is satisfactory if the customer's service is not terminated involuntarily, or if the customer's account has not been delinquent for an excess of forty-five (45) days at least three (3) times during the preceding twelve (12) months. The utility may withhold the release of the guarantor pending the resolution of any dispute regarding the customer's account or amounts transferred to the guarantor's account; and

(e) Prior to the signing of a guarantee agreement, a utility employee shall explain to the potential guarantor the consequences of the agreement. The utility employee shall obtain written acknowledgement from the guarantor that the oral explanation took place.

307.17 The deposit and guarantee provisions of this section shall apply only to those cases in which the utility requests a deposit from a customer on or after the effective date of this chapter.

SOURCE: Final Rulemaking published at 25 DCR 10381, 10398 (June 1, 1979); as amended by Final Rulemaking published at 40 DCR 5589 (July 30, 1993).