Surety Bond Encyclopedia

Utility Deposit Bond - Joe Wheeler EMC in Alabama

Brief Summary

Joe Wheeler EMC can ask a commercial or new large load customer for a deposit of roughly twice the highest monthly power bill. The cooperative says that deposit can be posted as a surety bond instead of cash, which keeps that money in your business while still giving JWEMC the security it needs.

Joe Wheeler Electric Membership Corporation, the electric cooperative based in Trinity, Alabama, may require a deposit or suitable guarantee of about twice the customer's highest monthly bill before it supplies electric service. For commercial accounts the deposit is based on prior usage history and equals twice the highest bill. JWEMC states that a security deposit can be satisfied with cash, check, surety bond or an irrevocable bank letter of credit.

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How to Apply for a Utility Deposit Bond:

Apply for service with Joe Wheeler EMC and ask what deposit your account requires.
Ask JWEMC to confirm it will take a surety bond for that account and whether it has a bond form.
Apply for the bond in the exact deposit amount JWEMC sets and pay the premium.
Deliver the executed bond to JWEMC before service is connected.
Keep the bond in force for as long as JWEMC requires security on the account.

Detailed Information About the Alabama Utility Deposit Bond:

How JWEMC sizes the deposit

Joe Wheeler EMC's Schedule of Rules and Regulations says a deposit or suitable guarantee approximately equal to twice the highest monthly bill may be required of any customer before electric service is supplied. Its commercial and non residential fee schedule puts it plainly: the commercial deposit is based on prior usage history and is equal to twice the highest bill. For new commercial or developer loads with no history, JWEMC says the deposit is based on estimated monthly billing, with the average being about two times the anticipated monthly bill.

That means there is no single bond amount. A small shop and a manufacturing plant will post very different figures. JWEMC sets the amount for each account, and the bond is written to match it.

A bond is an accepted option

JWEMC states that the security deposit can be satisfied with cash, check, surety bond or an irrevocable bank letter of credit. A bond lets the customer pay a yearly premium instead of handing over the full deposit in cash. If the account goes unpaid, JWEMC can make a claim on the bond, the surety pays it, and the customer must repay the surety.

Residential deposits work differently

For homes, the cooperative's residential fee schedule sets deposits by credit history. Excellent credit is $0, good is $100, fair is $250 and poor is $500. Most residential members simply pay that amount.

Refunds and final bills

Under JWEMC's rules the cooperative may return a deposit after one year at its option. When service ends, the deposit can be applied against unpaid bills and any balance is refunded. See JWEMC Operational Policy 201 for the full policy.

Before you buy

Get the required deposit amount in writing from Joe Wheeler EMC and confirm the bond form it will accept before the bond is issued. You can reach the cooperative at (256) 552-2300 or its main office at 25700 AL Highway 24, Trinity, AL 35673.

Eligibility and Requirements for a Alabama Utility Deposit Bond:

Joe Wheeler Electric Membership Corporation named as obligee.
Bond amount equal to the deposit JWEMC sets, generally about twice the highest or anticipated monthly bill.
Customer name on the bond matching the JWEMC service account.
Credit review of the business and its owners by the surety to set the premium.

Alabama Utility Deposit Bond FAQs:

How much is the bond?

It equals the deposit Joe Wheeler EMC sets for your account. For commercial accounts that is twice the highest bill based on prior usage. For new loads it is based on estimated billing, averaging about two times the anticipated monthly bill.

Will JWEMC accept a bond instead of cash?

Yes. JWEMC states that a security deposit can be satisfied with cash, check, surety bond or an irrevocable bank letter of credit. Confirm with the cooperative before the bond is issued.

Do residential members need a bond?

Residential deposits are set by credit history at $0, $100, $250 or $500. Most homeowners pay that amount directly.

Can I get the deposit back?

JWEMC may return a deposit after one year at its option. When service ends, the deposit is applied to any unpaid bills and the rest is refunded.

What will the bond cost?

The surety sets the premium based on the bond amount and the credit and financial history of the business and its owners. You get a quote when you apply.