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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
A utility deposit bond lets a business open or keep gas service with Atmos Energy in Texas without handing over a cash deposit. The money that would sit in a utility deposit account stays in your operating budget, and you pay a premium for the bond instead.
Atmos Energy may require a security deposit before it starts or continues natural gas service in Texas. Gas utility deposits are governed by Railroad Commission of Texas rule 16 TAC 7.45, which caps a required deposit at one-sixth of the customer's estimated annual billings. Where Atmos accepts a surety bond in place of cash, Atmos Energy Corporation is the obligee and sets the bond amount for the account.
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Atmos Energy is a gas utility regulated by the Railroad Commission of Texas. Its deposit practices fall under 16 TAC 7.45, the Commission's quality of service rule. A utility can ask an applicant for a deposit when it has no satisfactory payment or credit history to rely on. The rule caps the required deposit at an amount equal to one-sixth of the estimated annual billings for the account.
A cash deposit ties up money for as long as the utility holds it. A surety bond in favor of Atmos Energy Corporation guarantees the same thing, payment of your gas bills, without the cash outlay. If the account goes unpaid, Atmos can make a claim on the bond and the surety pays it, after which the account holder reimburses the surety. The bond amount is the deposit figure Atmos sets for your account, so get that number and any required form from Atmos before the bond is issued.
Under 16 TAC 7.45 a residential applicant can avoid a deposit by showing service with any utility for the same kind of service within the last two years without delinquency, by providing a satisfactory guarantee, or by establishing a satisfactory credit rating. The rule also requires the utility to pay interest on deposits it holds and to refund a residential deposit with interest after 12 consecutive bills paid without a disconnection for nonpayment. Commercial and industrial accounts are usually where a bond makes the most sense, because their deposits tend to be the largest.
The same as the deposit Atmos would otherwise require. Railroad Commission rule 16 TAC 7.45 caps that deposit at one-sixth of the account's estimated annual gas billings, so a large commercial or industrial account will have a larger bond than a small office.
Atmos Energy Corporation. The bond guarantees payment of the gas service account to Atmos.
Atmos can make a claim against the bond. The surety pays valid claims up to the bond amount, and the account holder must reimburse the surety for anything it pays.
Possibly. Under 16 TAC 7.45 a residential applicant with a good payment record with a utility over the last two years, a satisfactory guarantee or a satisfactory credit rating can avoid a deposit. Business accounts should ask Atmos what credit standards it applies to them.
The surety prices the bond from the bond amount and the owner's credit and financial strength. Request a quote with your actual deposit figure from Atmos to see your rate.
This website is a referral and marketing platform that connects users with licensed insurance agents. We do not issue surety bonds directly except in states where we are licensed. All bond applications are processed and fulfilled by licensed agents. By using this site, you agree to our Terms & Conditions, Privacy Policy, and the use of cookies. If you do not agree, please exit the site.
