Surety Bond Encyclopedia

Utility Deposit Bond - Black Hills Energy in Arkansas

Brief Summary

Black Hills Energy sets your gas deposit from your own bills, and the Arkansas Public Service Commission caps how high it can go. A business deposit is not refunded until the account closes, so cash put up today can sit with the utility for years. A surety bond in the deposit amount, if Black Hills accepts it for your account, keeps that cash in your business.

Black Hills Energy Arkansas, a natural gas utility, may require a deposit from a non-residential applicant to guarantee payment for service under its tariff and the Arkansas Public Service Commission General Service Rules. The deposit, and so the bond amount, is generally capped at two average bills for a new applicant or the two highest bills of the last 12 months for an existing customer. Confirm with Black Hills that it will take a surety bond in place of cash for your account and get its required bond wording before the bond is issued.

We can help with all Arkansas bonds!

How to Apply for a Utility Deposit Bond:

Ask Black Hills Energy for the deposit amount on your account and whether it will accept a surety bond in place of cash.
Get Black Hills Energy's required obligee name, account number and any bond wording it uses.
Complete the bond application with the business details and the deposit amount.
Pay the premium and receive the executed bond.
Deliver the original bond to Black Hills Energy before the deposit due date.
Keep the bond in force for as long as the utility holds the deposit requirement on the account.

Detailed Information About the Arkansas Utility Deposit Bond:

How the amount is set

Black Hills Energy Arkansas, Inc. supplies natural gas. Rule 10 of its Arkansas tariff says the company may require a deposit from a non-residential applicant to guarantee payment for service, and may require a new or increased deposit from an existing customer, in each case under the Commission's General Service Rules. A utility deposit bond is written for the same amount the utility would otherwise take in cash.

Those rules, codified at 23 CAR 455-401 through 455-408, limit the size of the deposit.

1. A new applicant billed after service begins pays no more than two average bills. 2. An applicant billed before service begins pays no more than one average bill. 3. An existing customer asked for a new or larger deposit can be required to hold no more than the total of its two highest bills in the last 12 months. 4. Higher caps apply after unauthorized use or tampering, proven misrepresentation, or an unpaid bill left from earlier service.

The average bill is the last 12 months of bills divided by 12, or the average usage for your rate class if you do not have that much history. Seasonal customers such as irrigation or ginning accounts are averaged over the months of their season. The Black Hills tariff also carries Commission approved variances that let it figure the deposit a different way when an account's 12 month history cannot be pulled electronically.

When a deposit can be raised

Once you are a customer, Black Hills can only ask for more for reasons the rules list, such as paying after the shut off date, two returned checks, repeated late payments, or using more gas than the estimate the deposit was based on. That last reason ends after the first 12 months of service unless you move or expand the business. The utility has to explain any new deposit in writing, including the amount and the due date.

Refunds and alternatives

Under 23 CAR 455-406, a utility does not have to refund a deposit on a business or commercial account until the account closes. The rules also let a utility accept the written guaranty of another customer instead of a deposit from a nonresidential customer, but that is the utility's choice. Whether Black Hills will take a surety bond for your account, and what wording it wants, is something to settle with its business customer service team before you buy the bond.

Eligibility and Requirements for a Arkansas Utility Deposit Bond:

Bond amount equal to the deposit Black Hills Energy sets for the account.
Deposit capped at two average bills for a new applicant billed after service, or the two highest bills of the last 12 months for an existing customer.
Black Hills Energy Arkansas, Inc. named as obligee on the bond.
Business legal name and service address matching the gas account.
Business deposits are held until the account closes under 23 CAR 455-406.

Arkansas Utility Deposit Bond FAQs:

How much will my bond be?

The same as the deposit Black Hills sets for your account. For a new applicant billed after service begins, the General Service Rules cap the deposit at two average bills. For an existing customer, the total on deposit cannot be more than the two highest bills of the past 12 months, with higher limits only for tampering, misrepresentation or an old unpaid bill.

Will I get a cash deposit back after a year of on time payments?

That automatic refund applies to residential customers. For business or commercial accounts, the rules allow the utility to keep the deposit until the account closes, which is why many businesses would rather bond it.

Can Black Hills raise the deposit later?

Only for reasons in 23 CAR 455-402, such as late or returned payments or using more gas than the estimate. The usage reason stops applying after the first 12 months unless you move or expand. The utility has to explain the reason and amount in writing.

Is a bond my only alternative to cash?

No. The rules let a utility accept a written guaranty from another customer in place of a nonresidential deposit. Each option is at the utility's discretion, so ask Black Hills which it will take for your account.

How is the premium set?

The surety prices it from the bond amount and a review of the business's finances and payment history.