Utility Deposit Bond - Northcentral Electric Cooperative in Mississippi

Brief Summary

When Northcentral Electric Cooperative asks for a security deposit, it is looking for a guarantee roughly equal to two months of your electric bill. For a commercial account with a large load, that is real cash. A utility deposit bond lets you give the cooperative that guarantee for a yearly premium and keep the cash in the business.

Northcentral Electric Cooperative, which serves members in DeSoto, Tate, Lafayette and Marshall counties in north Mississippi, may require a deposit or suitable guarantee approximately equal to twice the average monthly bill before electric service is supplied. A utility deposit bond names the cooperative as obligee and guarantees payment of the member's electric bills up to the bond amount. Confirm with Northcentral that a bond will be accepted and get its current form before the bond is issued.

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How to Apply for a Utility Deposit Bond:

• Apply for service with Northcentral and ask whether a deposit is required on your account and in what amount.
• Confirm that Northcentral will accept a surety bond in place of a cash deposit and request its bond form, if it has one.
• Have the account holder's legal name and service address exactly as they appear on the Northcentral application.
• Complete the bond application and review the premium quote.
• Pay the premium and deliver the signed bond, naming Northcentral Electric Cooperative as obligee, to the cooperative.
• Keep the bond in force for as long as the cooperative requires the guarantee on the account.

Detailed Information About the Mississippi Utility Deposit Bond:

How the amount is set

There is no fixed bond amount. Northcentral's Schedule of Rules and Regulations, Section 2, says a deposit of suitable guarantee approximately equal to twice the average monthly bill may be required of any member before electric service is supplied. So the bond is sized to your account. A small shop and a large commercial load will carry very different figures. Ask the cooperative for the exact amount it needs on your account before you apply.

Who is asked for it

Northcentral says a security deposit could be required depending on the service requested and a credit check. The rules also state that deposit policies are applied without regard to race, color, creed, sex, age, national origin or marital status. The deposit is also separate from the one time $50.00 membership fee every new member pays. The bond covers the deposit, not the membership fee.

What the bond guarantees

The bond promises the cooperative that the member's electric bills will be paid. If the account closes with an unpaid balance, Northcentral can make a claim against the bond up to its amount, and the member repays the surety for whatever it pays out. That mirrors how a cash deposit works under the rules, where the deposit is applied against unpaid bills at termination and any remainder is refunded.

Bond or cash

A cash deposit sits with the cooperative. Under Northcentral's rules, deposits greater than one month's average bill that are held longer than twelve months after being paid in full earn interest, credited to the account each January. A bond leaves the cash with you instead. For accounts where two months of billing is a large number, the bond is usually the better use of working capital.

How the premium is set

The surety quotes a yearly premium based on the bond amount the cooperative sets and on the credit of the business owner or the business itself. Stronger credit earns a lower rate.

Eligibility and Requirements for a Mississippi Utility Deposit Bond:

• Northcentral Electric Cooperative named as obligee.
• Bond amount set by the cooperative, approximately equal to twice the average monthly bill.
• A completed Northcentral application for service.
• The one time $50.00 membership fee, paid separately from the deposit.
• Valid government issued photo ID and Social Security number for the service application.

Mississippi Utility Deposit Bond FAQs:

Official and Additional Resources for the Mississippi Utility Deposit Bond: