Utility Deposit Bond - San Diego Gas & Electric Company (SDGE) in California
Table of Contents
Brief Summary
When SDG&E asks a business for a deposit, it can run up to twice the maximum monthly bill. That is real cash pulled out of the business for at least a year. A surety bond can meet the credit requirement for a premium instead, so the money stays in operations.
San Diego Gas & Electric can require a nonresidential customer to establish or re-establish credit before service starts or after late payments. Under SDG&E Rule 7, the deposit is capped at twice the average monthly bill for a Small Business Customer and twice the maximum monthly bill for larger nonresidential accounts. Residential customers cannot be charged a deposit for new service under CPUC Decision 20-06-003.
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How to Apply for an Utility Deposit Bond:
- Get the written deposit request from SDG&E showing the amount and the account or service address.
- Ask SDG&E credit staff to confirm a surety bond is acceptable and whether they have a required form.
- Apply for the bond in the exact amount SDG&E requested.
- Review the quote and pay the premium.
- Send the signed bond to SDG&E before the deposit due date or service start.
Detailed Information About the California Utility Deposit Bond:
Who gets asked for this
This bond is for businesses, not households. SDG&E Electric Rule 6 says that under CPUC Decision 20-06-003 the utility cannot require residential customers to pay a deposit to establish credit for new service. Nonresidential applicants are a different story. Before service starts they must establish credit by paying a cash deposit under Rule 7, by furnishing a qualified guarantor, by showing a clean two year payment history on similar service, or by otherwise establishing credit to the satisfaction of the utility. A surety bond falls under that last option, so SDG&E decides whether it will take one for your account. Ask before you buy.
How much SDG&E can ask for
Rule 7 sets ceilings, not a flat number, and the same caps appear in the electric and gas tariffs.
- Small Business Customer, as defined in SDG&E Rule 1: no more than twice the average monthly bill, as determined by the utility.
- Any other nonresidential account: no more than twice the maximum monthly bill, as determined by the utility.
SDG&E sets the actual figure, so the bond amount should match the deposit amount in the utility's request.
Re-establishing credit
An existing business account can be asked for new security too. Under Rule 6, a Small Business customer who pays late or was disconnected for nonpayment in the last 12 months may have to re-establish credit, though the tariff requires one warning letter in a 12 month period before a deposit request. A larger nonresidential customer can be asked to re-establish credit if the utility finds its conditions of service have materially changed or a condition of high risk exists.
Getting it back
Rule 7 returns a cash deposit, with interest, after 12 consecutive months of on time payment on all accounts while the customer stays active. Confirm with SDG&E's credit department how it handles release of a bond held in place of a deposit and which bond form it wants before the bond is issued.
Eligibility and Requirements for a California Utility Deposit Bond:
- San Diego Gas & Electric Company named as obligee.
- Bond amount equal to the SDG&E deposit request, which cannot exceed the Rule 7 cap for the account type.
- Legal business name and service address matching the SDG&E account.
- Surety authorized to write bonds in California.
- Owner credit review, which drives the premium.
California Utility Deposit Bond FAQs:
Not for new residential service. SDG&E Rule 6 states that under CPUC Decision 20-06-003 it cannot require residential customers to pay a deposit to establish credit for new service.
Twice the average monthly bill for a Small Business Customer. Twice the maximum monthly bill for any other nonresidential account. SDG&E determines the bill estimate.
Rule 6 lets a business establish credit to the satisfaction of the utility, which is where a bond fits. Confirm with SDG&E before the bond is issued.
Late payments or a disconnection for nonpayment can trigger a re-establishment request. Larger accounts can also be asked if their service conditions change materially or SDG&E sees a high risk.
Rule 7 returns a cash deposit with interest after 12 straight months of paying all bills on time while the account stays active. Ask SDG&E how it releases a bond.
The surety prices it from the bond amount and the business and owner credit. A quote takes a short application.
