Surety Bond Encyclopedia

Electric Department Utility Deposit Bond - City of Cookeville, TN in Tennessee

Brief Summary

The Cookeville Electric Department can ask for a deposit before it turns on or transfers electric service. A utility deposit bond lets a business meet that requirement without handing the city cash that sits idle for as long as the account is open. You pay a premium to the surety, the city holds the bond, and your working capital stays in your business.

The City of Cookeville owns and operates its own electric utility, now housed in the city's Energy Department as the Cookeville Electric Division, and bills it through the Customer Service Department at City Hall, 45 East Broad Street. This bond is posted by an electric customer in place of a cash deposit and guarantees the city that the account's electric bills will be paid. The bond is written for the deposit amount the city sets on the account, so confirm that figure and the city's current bond form with Customer Service before the bond is issued.

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How to Apply for a Electric Department Utility Deposit Bond:

Ask Cookeville Customer Service for the deposit amount on your account and the bond form it accepts.
Legal name of the account holder exactly as it appears on the service application, plus the service address.
Owner name, home address and Social Security number for the surety's credit review.
Complete the bond application for the deposit amount and review the quoted premium.
Deliver the signed bond to the Customer Service Department, 45 East Broad Street, Cookeville, TN 38501.
Pay the $45 nonrefundable electric application fee and provide the documents the city requests to open service.

Detailed Information About the Tennessee Electric Department Utility Deposit Bond:

Who posts this bond

The bond is posted by a Cookeville electric customer, usually a business opening or transferring an account, who would rather not pay the city a cash deposit. The City of Cookeville is the obligee. It runs the electric utility itself, and the city's Customer Service Department handles connection, disconnection and billing for electric, natural gas, water and sewer service. Cookeville's electric system distributes power purchased from the Tennessee Valley Authority as one of TVA's local power companies.

How the amount is set

There is no single statewide figure for this bond. It is written for the deposit the city requires on your particular account. Ask Customer Service for the deposit amount and whether it will accept a surety bond on its own form or on a surety's standard utility deposit bond form, then order the bond in exactly that amount with the account holder's legal name as it appears on the service application.

What the bond guarantees

If the account holder fails to pay electric charges owed to the city, including a final bill when service ends, the city can make a claim on the bond up to its full amount. The surety pays a valid claim and then collects that amount back from the account holder. The bond protects the city. It does not replace the monthly bill, and unpaid balances still carry the city's charges.

Other charges to expect

The city charges a nonrefundable $45 application fee for electric service. Bills mail roughly 15 days before the net due date, and a 5% late fee applies to amounts past due after that date. Service disconnected for nonpayment requires a $40 reconnection fee before it is restored, and restoration for nonpayment happens only during business hours. A returned check or bank draft costs $20.

How premium is set

The surety sets the premium as a percentage of the bond amount after reviewing the business owner's personal credit and, for larger deposits, the company's financial statements. Stronger credit earns a lower rate.

Eligibility and Requirements for a Tennessee Electric Department Utility Deposit Bond:

City of Cookeville named as obligee.
Bond amount equal to the deposit the city sets on the account.
Account holder name on the bond matching the utility application.
Copies of a valid driver's license and Social Security card for service requests, and a copy of the lease for renters.
Bond kept in force for as long as the city requires a deposit on the account.

Tennessee Electric Department Utility Deposit Bond FAQs:

How much is the bond?

It equals the deposit the City of Cookeville requires on your electric account. Customer Service sets that figure, so get it from them at 931-520-5214 or cs@cookeville-tn.gov before ordering the bond.

Who is the obligee?

The City of Cookeville, which owns and operates the electric utility and handles electric billing through its Customer Service Department at City Hall.

Does the bond cover my monthly bills?

No. You still pay each bill. The bond only lets the city recover unpaid electric charges if the account goes into default, up to the bond amount, and the surety will look to you to repay any claim it pays.

Can I cover gas or water service with the same bond?

The city bills electric, gas, water and sewer through one Customer Service Department. Ask them whether one bond can secure all services on the account or whether each utility needs its own.

What does the bond cost?

The surety sets the premium as a percentage of the bond amount based mainly on the owner's credit. Apply online to see your rate for the deposit amount the city gives you.