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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Opening a business account with Bessemer Electric and Water Service means a deposit equal to two months of your average bill before the lights come on. A utility deposit bond lets you keep that cash in the business and pay a premium instead.
Bessemer Code Sec. 110-50 requires every new, returning or reconnected utility customer to post a deposit before electric, water and sewer service starts. Commercial customers owe two months of the average monthly bill for the billing location, estimated from projected usage when there is no history. A utility deposit bond guarantees that amount to Bessemer Electric and Water Service in place of cash. Confirm the current bond form and filing steps with the utility before the bond is issued.
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The City of Bessemer owns its electric and water system, run as Bessemer Electric and Water Service, also called Bessemer Utilities. Under Sec. 110-6 of the city code, every residential or commercial account needs a deposit and service fee for each service, no matter how many accounts the customer already holds.
Sec. 110-50 sets the amount. Commercial customers pay a two month deposit based on the average monthly bill for that billing location over the past 12 months. A new location with no billing history gets an estimate based on projected energy loading or usage. Residential customers pay at least one month of the class average bill or the scheduled minimum, whichever is greater, and residential electric carries a $75 minimum or the scheduled figure if higher.
The deposit is not fixed for the life of the account. It must be raised when service is upgraded or renewed, and that includes name changes and reconnects. If a commercial account is cut off for nonpayment, the utility can raise the deposit to three times the average monthly bill before service is restored. Accounts that run past due often can also be asked for more when usage climbs. Plan for that when you set the bond amount.
The bond stands in for the cash deposit. If the account closes with an unpaid final bill, Bessemer Electric and Water Service can collect from the surety up to the bond amount, and the surety then looks to the business for repayment. The bond amount should match the deposit figure the utility quotes for your location. Ask the utility for that number and its required bond form before you apply.
Bessemer Code Sec. 110-50 sets it at two months of the average monthly bill for the billing location over the past 12 months. If the location has no history, the utility estimates it from projected usage.
Yes. The deposit must be raised when service is upgraded, renewed, renamed or reconnected. After a disconnect for nonpayment, a commercial deposit can go up to three times the average monthly bill, so the bond may need to be increased.
A cash deposit, with any interest, is credited to the final bill under Sec. 110-50. With a bond, the utility claims on it only if the final bill goes unpaid.
You pay a yearly premium, not the full deposit. The rate depends on the bond amount and the owner's credit, and you see the quote when you apply.
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