Section 407-660-7 - DEPOSITS FOR APPLICANTS AND CUSTOMERSA.Residential ApplicantsA 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; orb. 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 ApplicantsA utility may demand a deposit from any non-residential applicant as a precondition of granting service.
C.Residential CustomersA 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; or3. 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 CustomersA 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 Deposit1.Residential Applicants and CustomersA 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 CustomersA 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 Deposits1.Residential Applicants and CustomersA 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 CustomersThe 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:
b. Irrevocable bank letter of credit.d. Third-party guarantee instrument acceptable to the utility.e. Other security instrument acceptable to the utility.G.DisclosureWhen 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; and4. the procedure by which the applicant or customer can dispute the deposit requirement or deposit amount.H.InterestA utility must pay interest on deposits according to the provisions of Chapter 870 of the Rules of the Commission.
I.Retention and Refund1.RefundA 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 ServiceWhen 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.
65- 407 C.M.R. ch. 660, § 7