Surety Bond Encyclopedia

Utility Deposit Bond - Duke Energy Florida, LLC in Florida

Brief Summary

Duke Energy Florida's own tariff lists a surety bond as an acceptable alternative to a cash deposit. For a business account, that means a bond can secure service instead of handing Duke up to two months of projected electric charges in cash.

Duke Energy Florida, LLC may require a guarantee deposit before starting or continuing electric service. Its tariff, Sheet No. 4.070 as approved by the Florida Public Service Commission in Order PSC-17-0229-TRF-EI, lets the customer provide a cash deposit or another acceptable guarantee such as a surety bond, letter of credit or guarantee letter. Florida Statutes 366.05(1)(c) caps a new service deposit at two months of projected charges. Confirm the current amount and bond form with Duke Energy Florida before the bond is issued.

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How to Apply for a Utility Deposit Bond:

Ask Duke Energy Florida for the required deposit amount on your account.
Confirm Duke's current bond form and where to send it.
Have the account holder's legal name and service address exactly as on the Duke account.
Apply for the bond and review the quoted premium.
Pay the premium and receive the executed bond.
Deliver the bond to Duke Energy Florida before service starts or by the deadline Duke sets.

Detailed Information About the Florida Utility Deposit Bond:

Yes, Duke takes surety bonds, but read who can guarantee

Duke Energy Florida's Guarantee Deposits tariff, Sheet No. 4.070, says customers may provide a cash deposit or other acceptable guarantee such as a surety bond, letter of credit or guarantee letter. The detail people miss is who can stand behind that guarantee. For residential customers, the tariff requires the guarantor to be a Duke customer with a satisfactory payment record. For non-residential customers, the guarantor does not have to be a Duke customer but must be a bank, an insurance company or another institution with proven financial capability. A surety company qualifies, which is why deposit bonds are mainly a commercial tool with Duke.

How big the deposit can be

The tariff ties the deposit calculation to Florida Statutes 366.05(1)(c). For a new service request, the total deposit may not exceed two months of projected charges. For an existing account, the Public Service Commission order describes the cap as two months of average actual charges. Once a new customer has had 12 months of continuous service, the deposit is recalculated using actual data. That means your bond amount can go up or down as your usage changes, so plan to adjust it.

Refunds and interest

Duke pays interest on cash deposits held for a continuous period of six months or longer. After 23 months of continuous service with a satisfactory payment record, Duke refunds a residential deposit. For non-residential customers, Duke may either refund the deposit or begin paying a higher interest rate, at its option. A bond avoids the wait because no cash is held.

Who is on the bond

The account holder is the principal, the surety backs the bond, and Duke Energy Florida, LLC is the obligee. If the account goes unpaid, Duke can claim against the bond up to its amount. The account holder repays the surety for any valid claim.

Cost

The premium depends on the bond amount Duke requires and the credit and financial strength of the business.

Eligibility and Requirements for a Florida Utility Deposit Bond:

Duke Energy Florida, LLC named as obligee.
Bond amount no higher than two months of projected charges for new service.
A surety or insurance company with proven financial capability, as the tariff requires for non-residential guarantees.
Principal name matching the Duke account exactly.
Possible adjustment of the amount after recalculation using actual usage.

Florida Utility Deposit Bond FAQs:

Does Duke Energy Florida accept a surety bond instead of a cash deposit?

Yes. Tariff Sheet No. 4.070 lists a surety bond, letter of credit or guarantee letter as acceptable alternatives to a cash deposit. For non-residential accounts, the guarantor must be a bank, insurance company or other financially capable institution.

How much will Duke ask for?

For new service, Florida law caps the deposit at two months of projected charges. For existing accounts, the cap is two months of average actual charges.

Can the amount change after I post the bond?

Yes. After a new customer has 12 months of continuous service, the deposit is recalculated using actual data, so the bond may need to be increased or can be reduced.

When would a cash deposit come back?

Residential deposits are refunded after 23 months of continuous service with a satisfactory payment record. For non-residential accounts, Duke may refund the deposit or pay a higher interest rate instead, at its option.