Utility Deposit Bond - Salt River Project Agricultural Improvement & Power District (SRP) in Arizona
Table of Contents
Brief Summary
SRP asks most business accounts for a deposit sized to the two highest consecutive monthly bills it expects, then holds it for at least three years. A surety bond on SRP's own form satisfies that deposit, so the cash stays in your business instead of sitting with the utility for three years or more.
Salt River Project requires a deposit on all business accounts unless an SRP credit evaluation justifies a waiver, and only businesses in existence for at least two years are eligible for that evaluation. The deposit is meant to cover the two highest consecutive monthly bills anticipated for the account, or three for master meter residential accounts. SRP accepts cash, an irrevocable letter of credit, or a surety bond issued on SRP's bond form by a surety with a satisfactory A.M. Best rating.
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How to Apply for an Utility Deposit Bond:
- Get the deposit amount SRP has assessed for your account from Customer Credit Services.
- Confirm the exact legal customer name on the SRP account.
- Complete the bond application and review the quoted premium.
- Have the surety issue the bond on SRP's Surety Bond Form with SRP named as obligee.
- Send the executed bond to SRP Customer Credit Services, Mailstop PAB21T, 1667 N. Priest Drive, Tempe, AZ 85288-1231.
- Reissue the bond if your business legally changes its name.
Detailed Information About the Arizona Utility Deposit Bond:
Why newer businesses usually pay a deposit
Under the SRP Business Customer Credit Policy and Terms of Service, SRP requires a deposit for all business accounts unless its credit evaluation justifies a waiver. A business has to be in existence for at least two years before it is even eligible for that evaluation. So a new company, a new entity formed for a project, or a business that changes ownership should expect a deposit. Customers with four or more residential accounts may also be treated as a business under this policy.
How SRP sizes the bond
The deposit is intended to cover the two highest consecutive monthly bills anticipated for the account, or the receivables at risk as SRP determines them. Master meter residential deposits cover the three highest consecutive monthly bills. Without billing history, SRP estimates the bill from connected load, type of business and operating characteristics. Enrolling in SRP SurePay can cut the deposit by 25%, but cancelling SurePay brings it back to the standard amount. A required deposit is held for at least three years, after which you can ask SRP to reevaluate.
What SRP requires of the bond
The bond must be written on SRP's Surety Bond Form, with Salt River Project Agricultural Improvement and Power District as obligee, by a surety licensed in Arizona. The form has the surety warrant an A.M. Best rating of B+ or higher. It guarantees payment for electric service and performance under SRP's Rules and Regulations. SRP can make multiple claims up to the bond amount and can ask for more security after a partial payment. The surety must give SRP at least 30 days written notice by certified mail to cancel. The principal name has to match the SRP legal customer name exactly, and a bond must be reissued if the business changes its legal name.
Call SRP Customer Credit Services at (602) 236-9622 to confirm the bond amount and current form before the bond is issued.
Eligibility and Requirements for an Arizona Utility Deposit Bond:
- Bond amount equal to the deposit SRP assesses, based on the two highest consecutive monthly bills anticipated.
- Salt River Project Agricultural Improvement and Power District named as obligee.
- SRP's own Surety Bond Form. Substitute forms must satisfy every provision of SRP's form.
- Surety licensed in Arizona with an A.M. Best rating of B+ or higher.
- Principal name matching the SRP legal customer name exactly.
- Business entity in good standing with the Arizona Corporation Commission or its home state regulator.
Arizona Utility Deposit Bond FAQs:
Yes, if an SRP credit evaluation justifies it. A business must be in existence for at least two years to qualify for that evaluation. Newer businesses generally post a deposit.
It matches the deposit SRP assesses, which is meant to cover the two highest consecutive monthly bills anticipated for the account. Master meter residential accounts are set at three months. SurePay enrollment can lower the deposit by 25%.
At least three years. After three years of service you can request a new credit evaluation to see whether the deposit is still needed.
SRP requires its own Surety Bond Form. The form states that any substitute form must satisfy all of its provisions.
You pay a premium instead of the full deposit. The surety sets it based mainly on the business's credit and finances and the bond amount SRP requires.
