Bond Penalty: Set by private contractual agreement
A utility bond is a type of financial assurance that affords a public or private utility services provider a hedge to risk of non-payment of a service connection. This surety bond is generally required for new connections when the applicant has no payment history with the particular provider however an utility bond can also be demanded by a provider based on unsatisfactory applicant credit or a history of delinquency(ies) with the provider or other utility. Electric energy enterprises are the most frequent beneficiaries of this class of surety bond however municipal water/sewer/refuse collection services and natural gas enterprises may also require them. Utility bonds are strict financial guarantees and are often subject to adverse selection so underwriting efforts are largely focused on the financial strength and creditworthiness of the applicant. Below are some of the utility providers that regularly require surety bonding.
Puerto Rico Electric Energy Authority Surety Bond (Fianza de AEE)
A minimum utility bond penalty is require from ALL new connections. Larger surety bond penalties are required from past delinquent account users and from users that carrier unbilled balances post-hurricane María. FYI: Al momento Puerto Rico se prepara para convertir en Ley uno de los proyectos de pagos de depósitos o fianza en la Autoridad de Energía Eléctrica (AEE) y la Autoridad de Acueductos y Alcantarillados (AAA).
Con Edison Utility Bond
Upon entry in to energy contract with Con Ed the customer must post a surety bond to guarantee bill payment. The utility bond must remain in effect for three years unless unilaterally released by Con Ed. Surety may cancel the bond HOWEVER per Con Edison, the customer may be obligated to deposit a replacement if he or sher has made late payment within the most recent thirty six month period, financial statements indicate the potential for the customer's default on future payments, the customer has filed for bankruptcy or reorganization, or has been rendered a back-bill with the last twelve months for previously unbilled charges for service that came through equipment that was tampered with.
Duke Energy Progress Utility Bond
Strictly an electricity provider, Duke Energy, Duke Energy Progress and its sister companies may require a surety bond from business and residential customers. Residential/individual accounts are credit reviewed, and both classes of applicant are vetted for previous account history with Carolina Power & Light, Florida Power & Light and affiliated companies' records. This utility bond is subject to adverse selection.
Las Vegas Water District Utility Bond
The Las Vegas Valley Water District is a publicly owned, quasi-municipal non-profit agency of the State of Nevada. In its discretion the Water District may require financial assurance toward the purchase of water service AND to secure attorney fees in the case of collection. Surety may cancel the bond in which case the Water District may discontinue water service to the customer for failure to "establish credit" under the Water District's applicable Service Rules and Regulations.
There are MANY local and regional private and public service providers that offer the utility bond mechanism in lieu of cash act as a "security deposit" towards utility services. If you don't see your utility here, we will be happy to manuscript a surety bond for your particular need.
National surety bond leader, Surety One, Inc. offers same-day quoting of your utility bond need. Residential and commercial accounts are welcome. Our special program affords access to surety support regardless of applicant credit and financial condition. For more information call (800) 373-2804, email Underwriting@SuretyOne.com or click here to discuss an utility bond.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.