A.
Residential Applicants
A utility may demand a deposit from a residential applicant
only if one or more of the following circumstances apply:
1. An undisputed account balance for
residential utility service incurred in Maine is unpaid at the time that the
applicant requests service. The unpaid balance must be either:
a. for service provided by the utility from
whom the applicant requests service within the previous six years; or
b. for residential utility service provided
by any utility within the previous 12 months.
2. An unpaid, undisputed account balance for
residential utility service provided in Maine within the previous six years was
not paid until after the utility obtained a court judgment.
3. The applicant was disconnected for
nonpayment of an undisputed bill by any utility within the previous 12
months.
4. The applicant was
disconnected for unauthorized use or theft of service by any utility within the
previous 12 months.
5. The
applicant entered into a plan of repayment under Chapter 13 of the Federal
Bankruptcy Act and the Bankruptcy Court dismissed the plan for failure to
comply with its terms within the previous six years.
6. The applicant has no source of income
sufficient to pay the cost of utility service.
B.
Non-Residential Applicants
A utility may demand a deposit from any non-residential
applicant as a precondition of granting service.
C.
Residential Customers
A utility may demand a deposit from a residential customer
only if:
1. the customer files a
petition under the Federal Bankruptcy Act when the Federal Bankruptcy Act
allows the utility to demand a deposit;
2. the customer requests that service be
reconnected at the same or different location after the customer was
disconnected for nonpayment; or
3.
the customer had an unpaid account balance at the time the customer applied for
service for which the utility was unaware due to fraud or material
misrepresentation by the customer.
D.
Non-Residential Customers
A utility may demand a deposit from an existing
non-residential customer in lieu of disconnection authorized by Section
10 of this Rule or from a customer
who was not required to pay a deposit as a precondition of service but has
become an unacceptable credit risk as determined by the
utility.
E.
Amount of
Deposit
1.
Residential
Applicants and Customers
A utility may not demand a deposit in excess of the amount of
the two largest consecutive monthly bills for water service incurred within the
previous 12-month period at that location. In the case of a utility which bills
for service on a quarterly basis, the utility may not demand a deposit which is
more than the single largest quarterly bill within the previous 12-month period
at that location. The amount of the deposit demanded of a customer at a
location in which there is no previous usage history must be similar to that
demanded of customers with similar expected usage.
2.
Non-Residential Applicants and
Customers
A utility cannot demand a deposit which is more than the
amount reasonably anticipated to be due for water service for the two highest
billing periods expected within a 12-month period unless the utility bills on a
quarterly basis. If the utility bills per quarter, the utility can not demand a
deposit which is more than the single highest billing period for water
service.
F.
Payment of Deposits
1.
Residential Applicants and Customers
A utility must provide residential applicants and customers
the option of either paying the deposit in full or entering a payment
arrangement on the deposit amount that allows payment in at least three
installments: 50% payable upon the determination that the deposit is required;
25% payable 30 days after the determination; and 25% payable 60 days after the
determination.
a. A utility may demand
full payment of the deposit amount when an applicant requests service and the
applicant enters into a payment arrangement for an unpaid account balance at
the same time.
b. If a customer
requests reconnection following disconnection for nonpayment, the customer may
elect one of the payment options according to Section
12 of this Rule.
c. A utility may negotiate payment of the
deposit over a longer period as the utility determines appropriate.
d. Guarantee instead of deposit. A utility
must accept a third-party guarantee agreement in lieu of a cash deposit from a
residential customer if the guarantor is a customer whose account is in good
standing with the utility at the time the deposit is requested. The guarantee
agreement must be in writing, contain the disclosures required by this Section,
and be limited to a specific time period. The utility may cancel the guarantee
agreement if the guarantor incurs an arrearage with the utility that is more
than 60 days old, and a guarantor may cancel the agreement upon at least 30
days written notice to the utility and the customer. If the guarantee is
cancelled or the term has expired, the utility can demand a deposit from the
customer. If a deposit is not paid or if a payment arrangement is not
established within 30 days after the notice that requires payment of a deposit
is provided, a utility may begin further collection
procedures.
2.
Non-Residential Applicants and Customers
The utility must offer non-residential applicants and
customers the option of paying the required deposit in at least two equal
installments. Deposits may be in any of the following forms, listed in order of
preference:
a. Cash.
b. Irrevocable bank letter of
credit.
c. Surety bond.
d. Third-party guarantee instrument
acceptable to the utility.
e. Other
security instrument acceptable to the utility.
G.
Disclosure
When a utility demands a deposit, it must provide a written
disclosure to an applicant or customer within three business days after the
demand is made. If the disclosure is not provided within the 3 business day
period, the utility cannot collect the deposit from the customer. If the
disclosure was not provided within the 3 business day period and the customer
has already paid the deposit, the deposit must be refunded to the customer. A
copy of the disclosure must also be provided to any guarantor within the same
time period. The disclosure must contain:
1. the date that the utility demands a
deposit;
2. the amount of the
deposit;
3. the due date and
payment options for the deposit, including the option of a third-party
guarantor for residential applicants and customers; and
4. the procedure by which the applicant or
customer can dispute the deposit requirement or deposit
amount.
H.
Interest
A utility must pay interest on deposits according to the
provisions of Chapter 870 of the Rules of the Commission.
I.
Retention and Refund
1.
Refund
A utility must refund a deposit in any of the following
circumstances:
a. When the customer
establishes good credit. The water utility must return the deposit of any
residential customer without an overdue account balance if the customer pays
all bills or makes all payments pursuant to an established payment arrangement
by the due date, for one full year. The deposit must be returned within 30 days
of the customer meeting this requirement. Utilities may retain deposits
collected from non-residential customers for as long as the customer remains a
customer.
b. When the customer has
been disconnected and has not been subsequently reconnected within 30 calendar
days of the disconnection. The utility then must apply the deposit, including
accrued interest, to the account balance for utility service and refund the
remainder within 14 calendar days or with the final bill, whichever is later. A
transfer of service from one location to another is not considered
disconnection for the purpose of this paragraph.
c. When a customer closes an account. When a
customer closes an account, the utility may apply the deposit to an existing
account balance or other accounts for that customer that were closed within the
past six years that were not fully paid when the account was closed. The
utility must then refund any remaining deposit amount, including accrued
interest, to the customer within 60 days of the customer closing the customer's
account.
d. When a residential
customer substitutes a third-party guarantor. If a guarantor is provided in
accordance with the provisions of Section 7(F)(1)(d) above, the utility must
refund the deposit, including accrued interest, up to the limits of the
guarantee.
e. Earlier refund. The
utility may choose to refund a deposit, including accrued interest, any time
earlier than this subsection requires.
2.
Transfer of Service
When a customer transfers service from one location to
another location, an existing deposit may be transferred to the new location
and must be adjusted according to the anticipated usage at the new location. If
the anticipated usage at the new location is lower than the old location, the
utility must either refund the difference to the customer or must apply the
difference to the customer's account as a credit. If the amount of the refund
is equal to or less than the cost the utility will incur to issue a refund
check to the customer, the utility may credit the customer's account. If the
refund is greater than the cost to cut a check, the utility shall send the
customer a check for the refund amount or, if the customer so chooses, the
refund may be applied as a credit to the customer's account. If the usage is
higher at the new location, the utility may require the customer to pay a
deposit reflecting the incremental usage amount. In this instance, the
incremental amount must be collected in accordance with Section 7(F) above. The
transfer and any subsequent adjustment must be made within 30 calendar days of
the date the service is transferred.
