Utility Deposit Bond - Electric Board of Guntersville in Alabama

Brief Summary

A commercial account with the Electric Board of Guntersville can carry a deposit equal to two months of electric usage. The Board accepts a surety bond in place of cash, so that money stays in your business instead of sitting with the utility.

The Electric Board of Guntersville sets commercial deposits at an average of two months of electric usage at the service location, looking back no more than two years. New construction is based on two months of usage for a comparable building. The Board accepts the commercial deposit as cash, an irrevocable bank letter of credit, or a surety bond. The bond guarantees payment of the electric bills on the account.

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How to Apply for a Utility Deposit Bond:

• Request commercial service from the Electric Board of Guntersville and ask for the assigned deposit amount.
• Confirm the Board will take a surety bond for your account and whether it has its own bond form.
• Provide the legal business name exactly as it appears on the electric account.
• Owner or principal details for the surety's credit review.
• Pay the premium and receive the executed bond.
• Deliver the original bond to the Electric Board of Guntersville before service is connected.

Detailed Information About the Alabama Utility Deposit Bond:

This bond is for commercial accounts

The Electric Board of Guntersville lists the surety bond as an accepted form of security for commercial deposits. Residential customers are handled differently. Their deposit is $100, $200 or $300 depending on a credit report, and the Board's published policy describes those as deposits rather than bonds.

How the bond amount is set

There is no fixed bond amount. The Board bases a commercial deposit on an average of two months of electric usage at the location where service is requested, over a period not to exceed the last two years. For new construction with no usage history, it uses an average of two months of usage for a building comparable in size. The bond is written for whatever deposit figure the Board assigns to your account, so get that number from the Board before ordering the bond.

What the bond guarantees

The bond names the Electric Board of Guntersville as obligee and your business as principal. If the account goes unpaid, the Board can make a claim on the bond for the amount owed, up to the bond limit. The surety pays a valid claim and then looks to your business for repayment.

Your three options

The Board accepts cash, an irrevocable letter of credit from your bank, or a surety bond. Cash ties up working capital. A letter of credit usually draws on your credit line at the bank. A surety bond is paid for with a premium and leaves both untouched.

Before the bond is issued

Confirm the required amount, the exact account name and any bond form the Board wants used. The Board can be reached at (256) 582-5691. A new service connection charge of $20 also applies.

Eligibility and Requirements for a Alabama Utility Deposit Bond:

• Electric Board of Guntersville named as obligee.
• Bond amount equal to the commercial deposit the Board assigns, based on two months of average usage.
• For new construction, an amount based on two months of usage for a comparable building.
• Business name on the bond matching the utility account exactly.
• Owner credit review by the surety.

Alabama Utility Deposit Bond FAQs:

Official and Additional Resources for the Alabama Utility Deposit Bond: