Surety Bond Encyclopedia

Utility Deposit Bond - Florida Power & Light Company in Florida

Brief Summary

Florida Power & Light accepts a surety bond in place of a cash security deposit. For a business with a large monthly electric bill, that means paying a yearly premium instead of handing FPL roughly two months of billing in cash that sits on deposit for years.

Yes, FPL takes a surety bond. Florida Public Service Commission Rule 25-6.097(1)(c) says an applicant for electric service establishes credit by furnishing an irrevocable bank letter of credit or a surety bond, as an alternative to a cash deposit or a guarantor. FPL issues its own bond form, Form 289R, naming Florida Power & Light Company as obligee. There is no fixed bond amount. FPL sets the deposit for each account, and the bond is written for that figure.

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How to Apply for a Utility Deposit Bond:

Get the exact deposit amount FPL is requesting for the account.
Confirm the legal name on the FPL account matches an active Florida registered corporation.
Provide business and owner details for the surety's credit review.
Pay the premium and have the bond issued on FPL Form 289R.
Have the principal's officer and the surety's attorney in fact sign before a notary.
Mail the original bond and power of attorney to FPL Deposit Administration at the address on the form.

Detailed Information About the Florida Utility Deposit Bond:

A surety bond is an accepted deposit, not a workaround

Many business owners do not realize they can bond their FPL deposit at all. Florida Public Service Commission Rule 25-6.097 governs customer deposits for electric utilities. Under subsection (1), credit is deemed established when the applicant provides a satisfactory guarantor, a cash deposit, or an irrevocable letter of credit from a bank or a surety bond. FPL puts that into practice with its own surety bond form, Form 289R, which lets the customer furnish a bond for payment of monthly utility bills instead of a cash deposit.

How much the bond is for

The amount is set account by account, not by a schedule. FPL states that a business deposit is approximately two months of average billing at the service address. If FPL later asks for a new or additional deposit, Rule 25-6.097(3) requires at least 30 days written notice, separate from the bill, and caps the total at twice the average actual charges for the prior twelve months. When FPL raises the requirement, the bond amount has to rise with it.

FPL recommends the bond and letter of credit alternatives only for deposits above $1,000, since a small cash deposit is often cheaper than an annual premium.

Name match matters

FPL requires the bond to be issued in the exact name of an active Florida registered corporation that matches the name on the electric account. A mismatch between the bond principal and the account holder is the most common reason a bond is sent back. Partnerships should contact FPL for an application before ordering a bond.

Signing and filing

Form 289R is signed by a corporate officer or partner of the customer and by the surety's attorney in fact, and both signatures are notarized. The customer mails the original bond and the surety's power of attorney to FPL Deposit Administration at the address printed on the form. The surety can cancel as to future liability with 30 days written notice by certified mail, so a cancelled bond means FPL will ask for replacement security.

How premium is set

The surety looks at the business's credit and financial strength and the size of the deposit. An exact quote is available before you buy.

Eligibility and Requirements for a Florida Utility Deposit Bond:

Florida Power & Light Company named as obligee.
Bond written on FPL Form 289R.
Bond amount equal to the deposit FPL sets for the account.
Principal name identical to the FPL account name.
Notarized signatures for both principal and surety.

Florida Utility Deposit Bond FAQs:

Will FPL accept a surety bond instead of cash?

Yes. PSC Rule 25-6.097(1)(c) lists a surety bond as one way to establish credit, and FPL publishes its own surety bond form, Form 289R, for that purpose.

How much will the bond be?

Whatever deposit FPL sets for your account. FPL describes a business deposit as roughly two months of average billing at the service address, and any later increase is capped by rule at twice the average actual charges for the prior twelve months.

Is a bond worth it on a small account?

FPL recommends the bond and letter of credit options only for deposits above $1,000. Below that, cash is usually the simpler choice.

What happens if the surety cancels?

The surety must give FPL 30 days written notice by certified mail. After that, FPL can require a new deposit or replacement bond to keep service in good standing.