Surety Bond Encyclopedia

Utility Deposit Bond - Baldwin County Electric Membership Corporation in Alabama

Brief Summary

Baldwin EMC's commercial deposit page lists surety bonds, alongside cash and certificates of deposit, as an accepted way to secure a new commercial or industrial account. For a business whose deposit equals three months of estimated billing, the bond keeps that money in the business and costs an annual premium instead. The bond is issued quickly, names Baldwin Electric Membership Corporation as obligee, and goes to the cooperative with the membership application.

Baldwin Electric Membership Corporation, headquartered in Summerdale, Alabama and serving more than 90,000 meters in southwest Alabama, requires a security deposit from first time commercial and industrial applicants equal to three months of estimated billing, or an amount the Board of Trustees sets case by case. The cooperative states on its commercial deposit page that the deposit may be posted in cash, by surety bond, or by certificate of deposit. The bond on this page is that surety bond. There is no fixed bond amount. It equals the deposit the cooperative calculates for your account.

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How to Apply for a Utility Deposit Bond:

Ask Baldwin EMC for the deposit amount on your commercial or industrial account. For a first time applicant it is three months of estimated billing unless the Board of Trustees sets a different figure.
Confirm with the cooperative that it will take a surety bond on your account and whether it has preferred wording or a form.
Apply for the bond in the exact deposit amount, using the legal name of the business as it appears on the Baldwin EMC membership application.
Provide the owner or principal's name, address and Social Security number for the surety's credit review.
Pay the premium and receive the executed bond naming Baldwin Electric Membership Corporation as obligee.
Deliver the bond to a Baldwin EMC office with the signed application, the $5 membership fee and the $30 or $50 account fee.

Detailed Information About the Alabama Utility Deposit Bond:

Which deposit rule applies to you

Baldwin EMC treats commercial and industrial deposits differently from residential ones, and the surety bond option belongs to the commercial side.

A first time commercial or industrial applicant posts a deposit equal to three months of estimated billing, or whatever amount the Board of Trustees sets for the account on a case by case basis. The cooperative's commercial deposit page says that deposit may be made in cash, by surety bond, or by certificate of deposit.

An existing commercial member with 24 or more months of continuous service and a clean payment record may open a new account with half that amount, roughly one and a half months of estimated billing, and may ask for a refund of any existing deposit down to that level.

Residential applicants are on a different schedule. A first time residential member pays the greater of $350 or two and a half months of estimated billing, reduced to $200 or waived entirely with an acceptable credit score. The residential page does not list surety bonds as a deposit method, so a homeowner should ask the cooperative before ordering one.

What the bond does

The surety bond stands in for the cash deposit. If the account closes with an unpaid balance, Baldwin EMC can collect from the surety up to the bond amount, and the surety then collects from you. You pay the surety an annual premium that is a fraction of the deposit, set by the surety after a credit review of the business owner.

The bond amount is not published. Get the deposit figure from the cooperative first, then order the bond for that exact amount. A bond written for less than the required deposit will not be accepted.

Deposits can go back up

Baldwin EMC has a deposit upgrade policy. A commercial account that is disconnected for non payment within 12 months, lands on the collection list more than once in a year, or returns more than one insufficient funds check in 12 months has its deposit raised to three months of averaged billing. If that happens on a bonded account, expect to increase the bond or make up the difference in cash.

Fees that the bond does not cover

Every new member pays a $5 membership fee. There is also a non refundable account fee of $30 for a meter set or transfer at an existing location and $50 for a new service location with no meter. Those are paid in cash with the application. The cooperative's Prepay Power program requires no deposit at all, which may suit a small account better than a bond.

Baldwin EMC does not publish a bond form. Confirm with member services at (251) 989-6247 how it wants the bond worded before the surety executes it.

Eligibility and Requirements for a Alabama Utility Deposit Bond:

Bond amount equal to the deposit the cooperative sets for the account, not a fixed figure.
Baldwin Electric Membership Corporation, Summerdale, Alabama, named as obligee.
Business name on the bond matching the membership application exactly.
A surety licensed to write business in Alabama.
Credit review of the owner or principal. Credit shapes the premium rate rather than eligibility for most applicants.
The bond remains in force while the account is open, so expect annual renewal premiums until the cooperative releases it.

Alabama Utility Deposit Bond FAQs:

How much is the bond?

It equals your deposit. For a first time commercial or industrial applicant that is three months of estimated billing, or an amount the Board of Trustees sets case by case. An existing member with 24 months of clean payment history may qualify for half that, about one and a half months of estimated billing.

Does Baldwin EMC accept a surety bond?

Yes for commercial and industrial accounts. The cooperative's commercial security deposit page lists cash, surety bonds and certificates of deposit as acceptable. The residential page does not mention bonds, so a residential applicant should ask before ordering one.

I have good credit. Do I still need a deposit?

The credit based waiver and the $200 reduced deposit are described on the residential page. Commercial deposits are set by estimated billing or by the Board of Trustees, so plan on posting the full commercial deposit or a bond for it.

What happens if my account is disconnected for non payment?

Under the deposit upgrade policy the cooperative raises the deposit to three months of averaged billing after a non payment disconnection, repeated collection list entries, or more than one returned check within 12 months. A bonded account would need a larger bond or a cash top up.

Is Prepay Power a better option than a bond?

For a small account it may be. Prepay Power requires no member deposit at all. The bond makes the most sense for a larger commercial or industrial account where three months of billing is a meaningful amount of cash.