Georgia Utility Deposit Bond: A Comprehensive Guide
At a Glance:
- Average Cost: Between 2% to 15% of the bond amount per year based on the applicant’s credit
- Bond Amount: Determined on a case-by-case basis
- Who Needs it: Certain individuals and businesses seeking to activate utility services in Georgia
- Purpose: To ensure utility companies receive compensation for financial harm if the consumer fails to pay their utility bills
- Who Requires Utility Deposit Bonds in Georgia: Utility companies in Georgia that provide services to the general public
Background
Utility companies in Georgia often require customers expected to generate large monthly bills to pay a security deposit before initiating service. The security deposit protects utility companies from losses if the consumer fails to pay their monthly bills on time and in full. However, most utility companies in Georgia allow customers to purchase and maintain a surety bond in lieu of a cash deposit. Unlike most surety bonds, utility deposit bonds are not required by a government agency but by the utility company providing the service (unless a municipality owns the utility company).
What is the Purpose of the Georgia Utility Deposit Bond?
Utility companies in Georgia require consumers that do not wish to pay a security deposit to purchase a surety bond as a prerequisite to obtaining utility services. The bond ensures that the utility company will receive compensation for financial harm if the consumer fails to comply with the provisions laid out in the bond form. Specifically, the bond protects the utility company if the consumer does not pay their monthly bills. In short, the bond is a type of insurance that protects utility companies if the consumer fails to remit all required payments.
How Can an Insurance Agent Obtain a Georgia Utility Deposit Surety Bond?
BondExchange makes obtaining a Georgia Utility Deposit bond easy. Simply login to your account and use our keyword search to find the “utility” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the Georgia Utility Deposit Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Georgia Utility Deposit bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Georgia Utility Deposit Bond Cost?
The Georgia Utility Deposit bond can cost anywhere between 2% to 15% of the bond amount per year. Insurance companies determine the rate based on a number of factors, including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.
$10,000 Utility Deposit Bond Cost
| Credit Score* | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $200 | $20 |
| 680 – 799 | $300 | $30 |
| 650 – 679 | $500 | $50 |
| 600 – 649 | $750 | $75 |
| 550 – 599 | $1,500 | $150 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
Which Companies Allow Utility Deposit Bonds in Georgia?
The following Georgia utility companies allow customers to purchase a surety bond in lieu of depositing cash:
Albany Utilities Department
The city of Albany requires commercial customers to deposit cash or purchase a surety bond before initiating service. The bond amount must equal two months of estimated utility costs, as determined by the Department.
Agents can contact the Albany Utilities Department here.
Athens-Clark County Utilities
Commercial customers must either deposit cash or purchase a surety bond. The county determines the required bond amount on a case-by-case basis based on factors such as the customer’s estimated usage.
Agents can contact Athens-Clark County Utilities here.
Atlanta Gas Light Company
High-use customers are required to either deposit cash or purchase a surety bond with a minimum limit of twice their estimated (as determined by the company) highest invoice.
Agents can contact the Atlanta Gas Light Company here.
Blue Ridge Mountain EMC
General power customers must either deposit cash or purchase a surety bond before initiating service. The bond amount must be equal to twice the average monthly bill at the location for the previous 12 months. If the location is a new construction, Blue Ridge Mountain EMC will estimate the average monthly bill based on that of businesses of a similar size that have similar operations.
Agents can contact Blue Ridge Mountain EMC here.
Cairo Utilities
High-use customers may opt to purchase a surety bond instead of depositing cash. The city of Cairo will determine the required bond amount based on the business’s estimated usage.
Agents can contact Cairo Utilities here.
Calhoun Utilities
Commercial and industrial customers must either deposit cash or purchase a surety bond. The bond amount must equal twice the location’s average monthly during the previous 12 months. If the building is newly constructed, the city will determine the bond amount based on the location’s estimated usage.
Agents can contact Calhoun Utilities here.
Central Georgia EMC
Commercial customers are required to either deposit cash or purchase a surety bond in an amount equal to three times the location’s highest monthly bill. An engineer will estimate the highest monthly usage for newly constructed locations.
Agents can contact Central Georgia EMC here.
Cobb County Water System
High-use customers may opt to purchase a surety bond in lieu of depositing cash. The bond amount must be the greater of the company’s pre-determined rate based on their meter size or twice their estimated monthly bill. The company’s pre-determined rates can be found here (page 2).
Agents can contact the Cobb County Water System here.
Cobb Electric Membership Corporation
Commercial and industrial accounts must either deposit cash or purchase a surety bond. The bond amount is determined based on the location’s total square footage.
Agents can contact the Cobb Electric Membership Corporation here.
College Park Power
Businesses must either deposit cash or purchase a surety bond before initiating service. The city will set the required bond amount based on the business’s estimated usage.
Agents can contact College Park Power here.
Coweta-Fayette Electric Membership Corporation
Commercial customers are required to either deposit cash or purchase a surety bond. The required bond amount will typically equal twice the business’s estimated monthly bill.
Agents can contact Coweta-Fayette Electric Membership Corporation here.
Dalton Utilities
Businesses must either deposit cash or purchase a surety bond in an amount equal to 1.8 times the location’s highest monthly bill. Dalton utilities will estimate this amount for newly constructed locations.
Agents can contact Dalton Utilities here.
Fitzgerald Water, Light, and Bond Commission
Commercial customers must either deposit cash or purchase a surety bond in an amount determined by the commission. When determining the required bond amount, the commission will consider the customer’s estimated usage.
Agents can contact Fitzgerald Water, Light, and Bond Commission here.
Georgia Power Company
Businesses are required to either deposit cash or purchase a surety bond. The bond amount must be equal to twice the location’s estimated average monthly bill.
Agents can contact the Georgia Power Company here.
Greystone Power Corporation
Commercial customers must either deposit cash or purchase a surety bond prior to initiating service. The bond amount is determined on a case-by-case basis, but will generally be equal to 2.5 times the location’s actual or estimated monthly bill.
Agents can contact Greystone Power Corporation here.
Jackson Electric Membership Corporation
Businesses are required to either deposit cash or purchase a surety bond. The bond amount is determined based on the location’s actual or estimated usage.
Agents can contact Jackson Electric Membership Corporation here.
Jefferson Energy Cooperative
Commercial customers may opt to purchase a surety bond rather than deposit cash. The bond amount will typically be twice the location’s actual or estimated average monthly bill. However, the bond amount may be increased if the cooperative deems it necessary.
Agents can contact Jefferson Energy Cooperative here.
Liberty Utilities
High-use customers may opt to purchase a surety bond instead of depositing cash. The bond amount is determined on a case-by-case basis based on the customer’s estimated usage.
Agents can contact Liberty Utilities here.
Marietta Board of Lights and Water
Commercial customers must either deposit cash or purchase a surety bond. The bond amount is determined on a case-by-case basis based on the customer’s estimated usage.
Agents can contact Marietta Board of Lights and Water here.
Snapping Shoals Electric Membership Company (EMC)
High-use commercial customers may purchase a surety bond instead of depositing cash. The EMC determines the required bond amount based on the customer’s estimated usage.
Agents can contact Snapping Shoals EMC here.
Southwestern Electric Power Company
Businesses are required to either deposit cash or purchase a surety bond before initiating service. If the business is requesting service in a location previously operated by a business of a similar type and size, then the bond amount must be equal to the average monthly bill for that location during the previous 12-month period. If the location is a new construction, then the company will determine the required amount based on the monthly usage of similar businesses.
Agents can contact Southwestern Electric Power here.
Thomasville Utilities
High-use businesses must either deposit cash or purchase a surety bond in an amount equal to their estimated monthly bill during the period of greatest usage.
Agents can contact the city of Thomasville here.
Walton EMC
Commercial customers are required to either deposit cash or purchase a surety bond before initiating service. The bond amount must equal twice the location’s average monthly bill. For newly constructed locations, the EMC will determine the bond amount based on the location’s estimated usage.
Agents can contact Walton EMC here.
How Do Georgia Utility Customers File Their Bonds?
Utility customers in Georgia should submit their completed bond forms, including the power of attorney, to the company requiring the bond. The surety bond requires signatures from both the surety company that issues the bond and from the customer. In some instances, the bond will require witness signatures as well. Generally, the surety company will include the following information on the bond form:
- Name and address of entity/individual(s) buying the bond
- Surety company’s name and address
- Entity requiring the bond
- Bond amount
- Date the bond is signed
- Date the bond goes into effect
What Can Utility Customers in Georgia Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, utility customers in Georgia must ensure they pay their utility bills on time and in full.
What Other Insurance Products Can Agents Offer Utility Customers in Georgia?
Utility companies generally only require businesses to be bonded. As such, agents can offer their customers general business and liability insurance in addition to the utility deposit bond. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
Should Your Customer Purchase a Surety Bond or Deposit Cash?
Surety bonds are generally considered the better option for businesses, as they free up working capital that would otherwise have to be deposited with the utility company. For more information on whether your customer should purchase a bond or deposit cash, check out our Surety Bonds vs. Letters of Credit article here.
