Utility Deposit Bond - Sheffield Utilities in Alabama

Brief Summary

Sheffield Utilities does not publish a set commercial deposit. It sizes security for each nonresidential account, and new businesses often find the figure is larger than expected. A utility deposit bond lets the business post that security without tying up the cash, while Sheffield Utilities keeps the same protection against unpaid bills.

Sheffield City Ordinance requires a deposit on every Sheffield Utilities account as security for bill payment. Residential electric deposits are listed at $300, but the commercial deposit is shown as TBD because Sheffield Utilities calculates it for each facility. Nonresidential applicants sign a utility deposit and adequate securities agreement, and a surety bond is one way to post that security. Confirm the amount and the bond form with Sheffield Utilities before the bond is issued.

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How to Apply for a Utility Deposit Bond:

• Download and complete the Sheffield Utilities commercial service application.
• Give Sheffield Utilities the facility details it uses to calculate the deposit, such as square footage, amps, water needs and facility type.
• Get the commercial deposit amount Sheffield Utilities sets for the account.
• Order the bond for that amount with Sheffield Utilities as obligee.
• Sign the nonresidential utility deposit and adequate securities agreement.
• Deliver the bond with the application documents, all in the same legal name.

Detailed Information About the Alabama Utility Deposit Bond:

Why commercial customers see this bond

Sheffield Utilities provides electric, gas, water and wastewater service in Sheffield, Alabama. Its deposit policy says Sheffield City Ordinance requires a deposit for each account, held as security for payment of the utility bill. The published fee schedule lists a $300 electric deposit for renters and owners, but the commercial deposit is listed as TBD. That is the point most business owners miss. There is no flat commercial figure. Sheffield Utilities works it out for each facility.

How the commercial amount is set

For new nonresidential facilities, Sheffield Utilities asks for the building's square footage, approximate amps, estimated water needs, type of heating and cooling, and type of facility such as manufacturing, office, warehouse or retail. It uses that information to size service and to calculate security deposits. Ask for your figure once the application is in, and have the bond written for exactly that amount.

The securities agreement

The nonresidential application list includes a nonresidential utility deposit and adequate securities agreement along with the security deposit. A utility deposit bond is posted as that security. All documents must be in the same legal name, so the principal on the bond should match the applicant on the service application exactly. Confirm the current bond form and filing steps with Sheffield Utilities before the bond is issued.

What the bond guarantees

If the business leaves utility bills unpaid, Sheffield Utilities can claim against the bond. The surety pays up to the bond amount and then collects from the business. The bond does not pay the monthly bill and does not replace the account holder's duty to pay.

What it costs

You pay a premium, not the full deposit. The surety sets it from the bond amount and the business's credit and financial history.

Eligibility and Requirements for a Alabama Utility Deposit Bond:

• Sheffield Utilities named as obligee.
• Bond amount equal to the commercial deposit Sheffield Utilities calculates.
• Principal name identical to the legal name on the service application.
• Identification documents Sheffield Utilities requires for applicants.
• Credit review by the surety to set the premium.

Alabama Utility Deposit Bond FAQs:

Official and Additional Resources for the Alabama Utility Deposit Bond: