Utility Deposit Bond - Kissimmee Utility Authority in Florida

Brief Summary

Opening commercial electric service with Kissimmee Utility Authority means a deposit equal to about two months of billing, and KUA lets a business post a surety bond in that amount instead of cash. For a restaurant, warehouse or retail space with heavy usage, that keeps working capital in the business rather than sitting with the utility.

Kissimmee Utility Authority requires commercial customers to post a deposit of twice the average monthly bill for the same type of business at that location, with a $100 minimum. Under the KUA Schedule of Fees effective May 1, 2023, a business may satisfy the deposit with a surety bond, an irrevocable bank letter of credit or an assigned certificate of deposit in the deposit amount.

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How to Apply for a Utility Deposit Bond:

• Request the commercial deposit amount for your service address from KUA.
• Confirm KUA's required bond form and obligee wording.
• Have the business legal name exactly as it appears on the KUA account.
• Complete the bond application and review the quoted premium.
• Pay the premium and receive the executed bond in the deposit amount.
• Deliver the bond to KUA before service is connected.

Detailed Information About the Florida Utility Deposit Bond:

The bond replaces a commercial cash deposit

KUA's Schedule of Fees sets the commercial deposit at two times the average monthly bill for the same type of business at the same location. Where that history is not available, KUA estimates it. The minimum is $100. Because the figure is tied to expected usage, the bond amount is whatever KUA calculates for your account, not a fixed number.

KUA accepts three alternatives to cash for commercial accounts: an irrevocable bank letter of credit, an assigned certificate of deposit, or a surety bond, each in the amount of the deposit. A surety bond is usually the easiest of the three because it does not freeze funds at a bank.

The amount can change after six months

KUA re-evaluates commercial deposits after six months of service and adjusts them. If your actual billing comes in higher than the estimate, expect KUA to ask for a larger deposit, which means a bond rider increasing the amount.

Residential accounts work differently

Residential deposits are twice the average of the last 12 months of bills at the residence, with a $340 minimum. The residential alternatives listed by KUA are a satisfactory credit history or a guarantee from another residential KUA customer with good payment history. The surety bond option appears under the commercial rules.

What the bond guarantees

The bond promises KUA that the business will pay its utility bills. If the account closes with an unpaid balance, KUA can claim against the bond up to its amount, and the surety then looks to the business for repayment. Confirm the current deposit amount and KUA's bond form with the utility before the bond is issued, since the published fee schedule is dated May 2023.

Eligibility and Requirements for a Florida Utility Deposit Bond:

• Kissimmee Utility Authority named as obligee.
• Bond amount equal to the KUA commercial deposit, at least $100.
• Business name on the bond matching the utility account.
• Rider to increase the amount if KUA adjusts the deposit at the six month review.
• Credit review of the business owner.

Florida Utility Deposit Bond FAQs:

Official and Additional Resources for the Florida Utility Deposit Bond: