Elk River Municipal Utilities Customer Deposit Policy
In order to protect its ratepayers from customers who default on their accounts, the Elk River Municipal Utilities (ERMU) has adopted this Customer Deposit Policy.
Deposit Required: All residential, commercial and industrial customers of ERMU will be required to submit a deposit in the form set forth below subject to the exceptions set forth below. In addition, customers who have been disconnected by ERMU for non-payment of amounts due shall be required to submit a deposit before service will be reconnected. Failure to submit the required deposit when due shall be cause for ERMU to immediately terminate service.
Amount of Deposit: The amount required to be deposited shall be equal to two times ERMU’s estimate of the customer’s average monthly utility bill for electric service, and $100 for water and sewer service.
|*Note -||Deposit amounts for commercial accounts are individually calculated.
Deposit amounts for residential accounts are as follows:
Apartments (not all Electric)- $100.00
Home or Apartment (Electric only)- $150.00
Home with Water & Sewer - $ 100.00
Home with Electric, Water & Sewer - $250.00
Form of Deposit: The deposit shall be in the form of a cash deposit or an irrevocable letter of credit. If in the form of an irrevocable letter of credit, the letter of credit shall be renewed at least 30 days prior to its expiration. Failure to renew a letter of credit will result in the letter of credit being drawn on and the cash recovered from the letter of credit being held by ERMU as a cash deposit. If ERMU is not able to draw on the letter of credit, the customer shall submit a cash deposit prior to expiration of the letter of credit. Failure to submit the required deposit shall be cause for immediate termination of service by ERMU.
Receipt for Deposit: ERMU shall furnish the customer with a written receipt at the time a deposit is made. The receipt shall specify the conditions pursuant to which the amount of the deposit will be diminished upon return of the deposit to the customer.
Return of Deposit: Any deposit received by ERMU shall be returned to the customer within 45 days of termination of service, provided that the customer has paid in full all amounts due on the account. If the customer has not paid in full within 30 days of the termination of service, the deposit will be applied to any outstanding amounts owed by the customer to ERMU. If the deposit exceeds the amount due, the balance will be returned to the customer. If the deposit is not sufficient to cover the amount due, the customer shall remain liable to ERMU for the balance and shall pay the balance due within 15 days of notice from ERMU. ERMU reserves the right to use reasonable legal means to collect amounts due.
Interest on Deposits: Interest shall be paid on all deposits in excess of $20 at the rate established by Minnesota Statutes. ERMU may, at its option, pay the interest at intervals it chooses, but at least annually, by direct payment or as a credit on the customer’s account.
Submission of and Exceptions to Deposit Requirement:
A. Residential Customers.
Residential customers may submit the required deposit at the time service is requested, or have the deposit billed with the customerís first bill for services provided. Failure to pay a deposit when billed shall be cause for ERMU to immediately terminate service. ERMU may, in its discretion, waive the required deposit for residential customers if the customer consents to ERMUís collection of credit history data on the customer, the customerís credit score falls above 68 percent probability of non default, and the customer has no history of disconnection for non payment to ERMU, and no history of late payments to ERMU two times in 12 months.
B. Commercial and Industrial Customers.
All commercial and industrial customers shall submit the required deposit and enter into a service agreement with ERMU at the time service is requested. The customerís application for service shall identify the individual or business entity entering into the service agreement. The service agreement shall be an agreement on the part of this individual or business entity to make payment of all amounts billed by ERMU for electric, water and sewer services, and to be liable for any default or non-payment of amounts billed by ERMU. ERMU may, in its discretion, waive or reduce the required deposit for commercial and industrial customers if a service agreement is executed by the customer, the customer has provided ERMU with sufficient information to allow ERMU to analyze the credit risk of the individual or business entity executing the service agreement, and ERMU, in its sole discretion, determines to waive or reduce the deposit required based on its analysis of credit risk. Waivers and/or reductions in the deposit requirement shall be reserved for rare exceptions when the risk of default is minimal.