Surety Bond Encyclopedia

Utility Deposit (Gas Service) Bond - Centerpoint Energy Services, Inc. in Texas

Brief Summary

A gas utility deposit can tie up a meaningful amount of cash for a business, often for a year or more. This bond lets you meet the deposit requirement for gas service in Texas by paying a premium instead, so the cash stays in your operating account.

This utility deposit bond names CenterPoint Energy Services, Inc. as obligee and guarantees payment of a customer's natural gas service account in Texas in place of a cash deposit. Texas gas utility deposits are governed by Railroad Commission rule 16 TAC 7.45, which caps a required deposit at one-sixth of estimated annual billings. CenterPoint sets the deposit, and the bond amount matches it.

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How to Apply for a Utility Deposit (Gas Service) Bond:

Ask CenterPoint whether a guaranty agreement or a credit reference letter can waive your deposit.
If not, get the required deposit amount and account number from CenterPoint in writing.
Confirm CenterPoint will accept a surety bond for your account and get its bond form and obligee wording.
Owner or principal name, address and Social Security number for the credit review.
Complete the bond application, pay the premium and receive the executed bond.
Deliver the bond to CenterPoint before service is started or continued.

Detailed Information About the Texas Utility Deposit (Gas Service) Bond:

Check the waivers before you post anything

CenterPoint Energy's deposit options page lists two ways to have a deposit waived. One is a guaranty agreement signed by another CenterPoint Energy customer who has been a customer for at least 12 consecutive months with good credit. The other is a credit reference letter from another natural gas or electric company showing no more than two late payments, no returned checks and no disconnection orders in the last 12 months. CenterPoint also credits a cash deposit back to the account after 12 consecutive months of full, on time payments.

Where the bond fits

If neither waiver works, and especially for commercial accounts where deposits run larger, a surety bond can stand in for cash. The bond guarantees that the account holder will pay its gas bills. If the account goes unpaid, CenterPoint can claim on the bond, the surety pays up to the bond amount, and the account holder repays the surety.

How big the deposit can be

Texas Railroad Commission rule 16 TAC 7.45 limits a required gas utility deposit to an amount equal to one-sixth of the estimated annual billings for the account. Ask CenterPoint for the deposit figure in writing, confirm that it will accept a bond for your account, and get its required form and obligee wording before the bond is issued.

Eligibility and Requirements for a Texas Utility Deposit (Gas Service) Bond:

CenterPoint Energy Services, Inc. named as obligee, unless CenterPoint specifies other wording.
Bond amount equal to the deposit CenterPoint sets, capped under 16 TAC 7.45 at one-sixth of estimated annual billings.
Account holder name on the bond matching the gas service account.
A surety company authorized to write bonds in Texas.
Owner credit review, which drives the premium rate.

Texas Utility Deposit (Gas Service) Bond FAQs:

Can I avoid the deposit entirely?

Possibly. CenterPoint lists two waivers: a guaranty agreement signed by a customer of at least 12 consecutive months with good credit, or a credit reference letter from another gas or electric company showing a clean 12 month record.

How large can the deposit be?

Railroad Commission rule 16 TAC 7.45 caps a required gas utility deposit at one-sixth of the account's estimated annual billings. The bond amount is the deposit CenterPoint sets within that limit.

When does a cash deposit come back?

CenterPoint credits the deposit to the account after 12 consecutive months of full payments made on or before the due dates.

What happens if a bill goes unpaid?

CenterPoint can claim on the bond. The surety pays valid claims up to the bond amount, and the account holder must repay the surety.

How is the premium set?

The surety prices the bond from the deposit amount and the owner's credit and financial strength. Apply with your actual deposit figure to see your rate.