Mich. Admin. Code R. 460.111a - General deposit conditions for nonresidential customers

Rule 11a.

(1) A utility may require a deposit from a customer or applicant as a condition of receiving or continuing nonresidential service if 1 of the following conditions applies:

(a) The customer or applicant has an unfavorable credit rating with a credit reporting agency.

(b) The customer or applicant has an unpaid delinquent bill for natural gas or electric service.

(c) The customer or applicant has engaged in unauthorized use of utility service within the last 6 years.

(d) Two or more shutoff notices have been issued within the most recent 12-month period.

(e) Service has been discontinued for nonpayment.

(f) An unsatisfactory record of bill payment within the first 6 months after service commenced exists.

(2) If a deposit for nonresidential service is required, all of the following limitations apply:

(a) A deposit for small nonresidential customers shall not be more than 15% of the customer's annual electric or natural gas bill.

(b) Large nonresidential customers may be required to pay a deposit equal to 25% of the customer's annual electric or natural gas bill.

(c) If a customer or applicant has engaged in unauthorized use of utility service, the deposit shall not be more than 4 times the average peak season monthly bill, or 4 times the utility's system average peak season monthly bill for the same class of service if the customer's consumption history for the service is unavailable.

(3) During the heating season, a small nonresidential customer shall not pay a deposit unless that customer has been shut off for nonpayment during the prior 12 months. A customer deposit under this subrule may not exceed the customer's average monthly bill.

(4) A utility may retain a deposit for nonresidential service until the customer accrues a record of 12 continuous months of bill payment on or before the due date.

(5) A utility shall pay interest at the rate of 5% per annum on all deposits for nonresidential service. A utility shall credit interest semiannually to the customer's service account or pay it upon the return of the deposit, whichever occurs first.

(6) If nonresidential service is terminated, the utility may apply the deposit, plus accrued interest, to the customer's unpaid balance. If the deposit plus the accrued interest is more than the unpaid balance, then the utility shall return the excess to the customer.

(7) A utility shall maintain a detailed record of all deposits received for nonresidential service. The record shall show all of the following information:

(a) The name and address of the depositor and applicant or customer.

(b) The location served by the utility at the time of making the deposit and each successive location while the deposit is retained.

(c) The amount and date of the deposit.

(d) The dates the utility paid interest and the amounts.

(e) Each transaction concerning the deposit.

(f) The terms and conditions governing the return of the deposit.

(8) A utility shall provide the nonresidential customer or applicant with a receipt for the deposit and instructions regarding how a customer who is entitled to the return of the deposit may obtain it.

(9) The utility shall make reasonable efforts to locate customers due unclaimed deposits and credits for nonresidential service.

(10) Each utility shall, within 60 days of the effective date of this rule, transmit a notice explaining the conditions under which a deposit for nonresidential service may be required to all existing customers. This notice shall also be provided to new customers within 30 days after service has commenced or, at the utility's option, with the first bill rendered.

(11) The utility may, at its option, accept an irrevocable financial institution letter of credit, a surety bond, or other corporate guarantee instead of a deposit for nonresidential service.

Notes

Mich. Admin. Code R. 460.111a

2017 MR 22, Eff. 12/11/2017