Deposits and Guarantees of Payment

PURPOSE: This rule establishes reasonable and uniform standards regarding deposits and guarantees required by utilities. (1) A utility may require a deposit or other guarantee as a condition of new residential service if— (A) The applicant has a past-due bill, which accrued within the last five (5) years and, at the time of the request for service, remains unpaid and not in dispute with a utility for the provision of the same type of service; (B) The applicant has, in an unauthorized manner, within the last five (5) years prior to applying for service, interfered with or diverted the service of a utility in the provision of the same type of service; or (C) The applicant is unable to establish an acceptable credit rating under standards contained in the utility’s commission-approved tariffs. If the applicant has insufficient credit history to determine a credit score, then the applicant shall be deemed to have established an acceptable credit rating if the customer meets any of the following criteria: 1. Owns or is purchasing a home; 2. Is and has been regularly employed on a full-time basis for at least one (1) year; 3. Has a regular source of income; or 4. Can provide adequate credit references from a commercial credit source. (2) A utility may require a deposit or guarantee as a condition of continuing or re-establishing residential service if— (A) The service of the customer has been discontinued by the utility for nonpayment of a delinquent account not in dispute; or (B) The customer has interfered with, diverted or, in an unauthorized manner, used utility service delivered to the customer’s premises; or (C) The customer has failed to pay an undisputed bill on or before the delinquent date for five (5) billing periods out of twelve (12) consecutive monthly billing periods, or two (2) quarters out of four (4) consecutive quarters. Prior to requiring a customer to post a deposit under this subsection, the utility shall send the customer a written notice explaining the utility’s right to require a deposit or include such explanation with each written discontinuance notice. Notwithstanding the foregoing; a utility may not require a deposit from a customer if such customer has consistently made a payment for each month during the twelve (12) consecutive months, provided that each payment is made by the delinquent date; and each payment made is at least seventy-five dollars ($75) or twenty-five percent (25%) of the total outstanding balance, provided that the total outstanding balance is three hundred dollars ($300) or less. This provision shall not apply to any customer whose total outstanding balance exceeds three hundred dollars ($300) or to any customer making payments under a payment plan previously arranged with the utility. (3) Unless prohibited by Chapter 13, if the customer is unable to pay the entire deposit assessed under the provisions of subsection (2)(A) or (C) of this rule during the months of November, December, and January, the deposit for gas or electric service may be paid by installments over a six- (6-) month period. (4) A deposit shall be subject to the following terms: (A) It shall not exceed two (2) times the highest bill or four (4) times the average bill, whichever is stated in the utility’s tariff for utility charges actually incurred or estimated to be incurred by the customer during the most proximate twelve- (12-) month period at the service location or, in the case of a new customer, who is assessed a deposit under subsection (1)(C) of this rule, one-sixth (1/6) of the estimated annual bill for monthly billed customers or one-third (1/3) of the estimated annual bill for quarterly billed customers for utility charges at the requested service location; (B) It shall bear interest at a rate specified in the utility’s commission-approved tariffs, which shall be credited annually to the account of the customer or paid upon the return of the deposit to the customer, whichever occurs first. Interest shall not accrue on any deposit after the date on which a reasonable effort has been made to return it to the customer. The utility shall make all reasonable efforts to return a deposit to its customer when the customer is entitled to the return of their deposit and shall keep records of efforts to return a deposit. This rule shall not preclude a utility from crediting interest to each service account during one (1) billing cycle annually; (C) Upon discontinuance or termination other than for a change of service address, it shall be credited, with accrued interest, to the utility charges stated on the final bill and the balance, if any, shall be returned to the customer within twenty-one (21) days of the rendition of the final bill; (D) Upon satisfactory payment of all undisputed utility charges during the last twelve (12) billing months, it shall be promptly refunded or credited, with accrued interest, against charges stated on subsequent bills. Payment of a charge is satisfactory if received prior to the date upon which the charge becomes delinquent provided it is not in dispute. Payment of a disputed bill shall be satisfactory if made within ten (10) days of resolution or withdrawal of the dispute. A utility may withhold refund of a deposit pending the resolution of a dispute with respect to charges secured by the deposit; (E) A utility shall maintain records which show the name of each customer who has posted a deposit, the current address of the customer, the date and amount of deposit, the date and amount of interest paid, and information to determine the earliest possible refund date; (F) Each customer posting a security deposit shall receive, in writing, at the time of tender of deposit or with the first bill a receipt as evidence of deposit, unless the utility shows the existence or nonexistence of a deposit on the customer’s bill, in which event the receipt shall not be required unless requested by the customer. The receipt shall contain the following minimum information: 1. Name of customer; 2. Date of payment; 3. Amount of payment; 4. Identifiable name, signature, and title of the utility employee who received the payment; and 5. Statement of the terms and conditions governing the payment, retention, and return of deposits; (G) A utility shall not deprive a customer of a deposit return within five (5) years following the date that the customer is due for a deposit return, even though the customer may be unable to produce the original receipt; provided that the customer can produce adequate identification; (H) No deposit or guarantee or additional deposit or guarantee shall be required by a utility because of race, sex, creed, national origin, marital status, age, number of dependents, source of income, disability, or geographical area of residence; and (I) A utility shall permit an applicant or customer required to make a deposit to pay the deposit in installments unless the utility can show— 1. Applicant has in an unauthorized manner, interfered with, or diverted the same type of service within the last five (5) years; or 2. If a customer has in an unauthorized manner interfered with, diverted, or used the service of the utility situated on or about or delivered to the customer’s premises; or 3. A likelihood that the customer does not intend to pay for the service. (5) In lieu of a deposit, a utility may accept a written guarantee. The limit of the guarantee shall not exceed the amount of a cash deposit. (6) A guarantor shall be released upon satisfactory payment of all undisputed utility charges during the last twelve (12) billing months. Payment of a charge is satisfactory if received prior to the date upon which the charge becomes delinquent, provided it is not in dispute. Payment of a disputed bill shall be satisfactory if made within ten (10) days of resolution or withdrawal of the dispute. (7) A sewer utility shall not require a deposit for flat rate billing to a customer for residential service that is rendered in advance of service being provided. AUTHORITY: sections 386.250(6) and 393.140(11), RSMo 2016.* This rule originally filed as 4 CSR 240-13.030. Original rule filed Dec. 19, 1975, effective Dec. 30, 1975. Amended: Filed Oct. 14, 1977, effective Jan. 13, 1978. Amended: Filed June 10, 1992, effective Feb. 26, 1993. Rescinded and readopted: Filed Sept. 22, 1993, effective July 10, 1994. Amended: Filed Aug. 1, 2013, effective March 30, 2014. Amended: Filed Nov. 7, 2018, effective July 30, 2019. Moved to 20 CSR 4240-13.030, effective Aug. 28, 2019. *Original authority: 386.250(6), RSMo 1939, amended 1963, 1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996 and 393.140(11), RSMo 1939, amended 1949, 1967.