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Alabama Utility Deposit Bonds
Most utility companies in Alabama allow their General Power Customers, who are a commercial or industrial business, to purchase a Utility Deposit Bond instead of paying the full security deposit in order to receive utility services. The utility company uses the security deposit as a guarantee to receive payment if a customer stops making payments and the surety bond from Jet Insurance Company serves that purpose.
For only a small premium payment to Jet, as opposed to the full security deposit amount, you can receive the electric, gas, or water services you need for your business to run.
How Much Does an Alabama Utility Deposit Bond Cost?
With Jet, the cost of the bond is always a small percentage of the security deposit amount. Below are some examples of a one-year bond cost for preferred bond applicants.
| Bond Limit | Cost |
|---|---|
| $5,000 | $100 |
| $10,000 | $200 |
| $20,000 | $500 |
Jet does factor in the personal credit of the applicant. That is very similar to the process used by most utility companies when determining deposit amounts for residential accounts, but Jet will only charge a small fraction of the deposit amount. Multi-year term bonds can be purchased at a discount.
Alabama Utility Deposit Bond Company Breakdown
We have broken down the bonding requirement for 23 different utility companies in Alabama. Find the utility company you need to provide a security deposit with and review how the surety bond alternative works within that utility’s bylaws.
Alabama Power Company - Birmingham and Eastern Divisions
The security deposit or surety bond amount is 2x the average monthly electric bill. For new accounts, you can receive an estimate from the Alabama Power Company to determine what the security deposit total will be. The Alabama Power Company has the option to cancel the bond or increase the bond limit to 2x the highest monthly electric bill with a 15-day notice. The increase would most likely be caused due to a history of late payments. Throughout the lifespan of the service, the utility company will review your usage and make an adjustment to the security deposit to match usage for 2x the average monthly payment. The bond has a 30-day cancellation provision, where it will remain active following the receipt of cancellation notice from Jet to the Alabama Power Company, should the bond need to be cancelled prior to the stoppage of service. The security deposit, and thus the utility deposit bond, are required to be in place until service has stopped.
Alabama Power Company
600 North 18th Street
Birmingham, AL 35291
888-430-5787
Albertville Municipal Utilities Board
Providing electric, water, and wastewater services to the City of Albertville, the Utilities Board allows general power customers to provide the surety bond in lieu of a security deposit for any of their services. The security deposit or bond amount is 2x the average monthly bill. For new services, the deposit amount will be estimated by the Board, so check with them. The deposit amount may be reevaluated by the Board at their discretion. If it changes, you will need to notify Jet so we can revise the bond amount and collect or refund premium appropriately. The surety bond has a 60-day cancellation clause, giving plenty of time to find an alternative should you choose to cancel the bond. The surety bond is not required once the service is terminated.
Albertville Municipal Utilities Board
PO Box 130
Albertville, AL 35950
256-878-3761
Arab Electric Cooperative, Inc.
Providing electricity to Arab, Alabama, the Arab Electric Cooperative requires a security deposit of 2x the highest monthly bill from the last 12 months plus a $25 meter set fee. The Coop will make an estimate for new service based on similar businesses and facilities deposit amounts. The deposit or bond amount is subject to an annual review, so if anything changes please notify Jet immediately and we will make appropriate arrangements to file the correct amount with the Coop. The utility deposit bond option is available to member classes GSA1, GSA2, and GSA3 or higher, which are different levels of commercial and industrial customers. Should Jet need to cancel the bond there is a 60-day cancellation period, before the bond is cancelled by Arab Electric Cooperative. Upon the termination of service the bond will no longer be required and can be cancelled.
Arab Electric Cooperative, Inc
331 S Brindlee Mtn. Pkwy.
Arab, AL 35016
256-586-3196
Baldwin County Electric Membership Corporation
The Baldwin EMC provides electricity to Baldwin County and part of Monroe County. They have a steep security deposit or bond amount that is equal to 3 months of the total billing amount. Baldwin EMC does review the deposit or bond amount after 2 years and will reduce the amount if there have not been any issues with payments. But if you get into trouble, they will jack that amount back up to the 3 months average amount. Jet can cancel the bond, if need be, after a 15-day grace period with Baldwin EMC. The security deposit or bond cannot be released until service has been stopped.
Baldwin County Electric Membership Corporation
PO Box 220
Summerdale, AL 36580
251-989-6247
Bessemer Utilities
Got a business in Bessemer, Alabama, and need electric or water service? Then you are going to need to pay a security deposit that is 2x the average monthly bill or you can purchase a surety bond in that amount and will only need to make a small premium payment for the bond. Bessemer Utilities can cancel or increase the bond up to 2x the highest monthly bill with a 15-day notice, most likely following a history of late payments. The bond will be cancelled following a 30-day notice provided from Jet to Bessemer and gives the business a grace period to find a replacement surety bond or to shut down the operation.
City of Bessemer Utilities
PO Box 1246
Bessemer, AL 35021
205-481-4333
Cherokee Electric Cooperative
The Cherokee Electric Cooperative provides electricity to Calhoun, Cherokee, DeKalb, Etowah, and Marshall County, Alabama. For commercial and industrial security deposit amounts, check with the Coop and report back to Jet what bond amount is needed during the online application. We have a bond form setup to be filed directly with the Coop. The bond has a 30-day cancellation period before it can be released by the Coop.
Cherokee Electric Cooperative
PO Box 0
Centre, AL 35960
256-927-5524
Cullman Power Board
The Cullman Power Board provides electrical service to the residents of Cullman, Alabama. A security deposit or utility deposit bond in an amount that is 2x the highest bill for the rate classification of the business is required. The deposit amount for the commercial customer (or GSA) may be reviewed by the Board and additional deposit amounts may be required if services are turned off due to past due payments. The bond can be cancelled with notice to the Cullman Power Board from Jet. The bond must be in place, much like the security deposit, until the service has been disconnected.
Cullman Power Board
PO Box 927
Cullman, AL 35056
256-736-5616
Cullman-Jefferson Counties Gas District
Got gas? If not, Cullman Jefferson Gas will provide you with natural gas in Blount, Cullman, Jefferson, and Morgan County, Alabama. A security deposit or surety bond in the amount of 1 month’s estimated gas usage is required. There is a 30-day cancellation period before the bond can be cancelled. The security deposit or the bond replacing it must be in place until service stops.
Cullman-Jefferson Counties Gas
PO Box 399
Cullman, AL 35056
256-734-1911
Decatur Utilities
Electric, natural gas, water, and wastewater services for the Decatur, Alabama area are provided by Decatur Utilities. New commercial and industrial companies are required to make a security deposit in the amount of 2 months’ expected usage. That deposit can be avoided by purchasing a utility deposit surety bond from Jet for a small fraction of the cost. The amount required to be posted with Decatur Utilities can be decreased to 1 month’s expected usage unless there is a history of late payment at which time it may go back to 2 months usage. This bond has a 60-day cancellation period before it is cancelled with Decatur following a notice by Jet.
Decatur Utilities
PO Box 2232
Decatur, AL 35609
256-552-1400
Dixie Electric Cooperative
Dixie Electric Cooperative provides electrical services to parts of Barbour, Bullock, Lee, Lowndes, Macon, Montgomery, Pike, and Tallapoosa County in Alabama. A security deposit that is 2.5x the average monthly bill or based on the electrical load requirements is mandatory for commercial and industrial customers. A surety bond can be used in lieu of the deposit, and that bond or deposit must be in place until service stops. The bond with Jet has a 30-day cancellation period wherein it will stay active for that time frame should you need to provide the deposit in some other form.
Dixie Electric Cooperative
PO Box 242189
Montgomery, AL 36124
334-288-1163
Florence Utilities
Businesses in Florence, Alabama receive their electric, gas, and water services from the City of Florence. The security deposit, or the bond that can be used to replace the deposit, is set at 1.5x the average monthly bill. The bond must stay in place until service is terminated. The surety bond can be cancelled following a 60-day period after Jet notifies Florence.
City of Florence Utilities
110 West College St.
Municipal Building Room 106
Florence, AL 35630
256-760-3512
Franklin Electric Cooperative
Businesses (also known as General Power Customers) in Colbert, Franklin, and Lawrence County, Alabama who have security deposits amounts required over $5,000 for electrical utility service with Franklin Electric Cooperative can have them replaced by a surety bond from Jet. The deposit amount is calculated as the average of 2 months’ bills combined. The deposit or bond must be in place as long as electrical service is provided. The bond can be cancelled following a 90-period following notice from Jet to Franklin Electric Cooperative.
Franklin Electric Cooperative
225 Franklin St NW
Russellville, AL 35653
256-332-2730
Huntsville Utilities
Huntsville Utilities provides electric, gas, and water services to Huntsville, Alabama. A security deposit is required prior to starting services, but customers can opt to purchase a utility deposit bond from Jet to save some cash instead of forwarding over a deposit in full to Huntsville. The customer must inquire to Huntsville Utility what the security deposit amount is and report that back to Jet, who will set the correct bond limit to be filed with Huntsville. The bond has a 60-day cancellation period in which the bond remains active following notice from Jet to Huntsville.
Huntsville Utilities
PO Box 2048
Huntsville, AL 35804
256-535-1200
Marshall County Gas
In all of Marshall County, except Boaz, and some parts of Blount, Cullman, Etowah, Jackson, Jefferson, and Madison County, Alabama, businesses receive gas services from the Marshall County Gas District. The security deposit or surety bond used to replace it must be 2x the highest bill amount. The deposit or bond must be in place with Marshall County Gas until service stops. The bond can be cancelled by Jet following a 30-day cancellation period.
Marshall County Gas
1245 Gunter Ave
Guntersville, AL 35976
Mobile Area Water & Sewer System
Businesses in Mobile, Alabama can avoid the required security deposit with a surety bond from Jet. The deposit or bond amount is based on the meter size or consumption of the user, whichever is greater. The bond has a 30-day cancellation clause before the cancellation is finalized with MAWSS. Until service is permanently cancelled the deposit or bond must be submitted and active with MAWSS.
Mobile Area Water & Sewer System
4725 Moffett Rd
Mobile, AL 36618
251-694-3100
Montgomery Water Works
Businesses in Montgomery, Alabama receive water and wastewater services from the Montgomery Water Works & Sanitary Board. A security deposit is required that is $100 minimum and up to 3x the average monthly bill. A utility deposit bond from Jet can be purchased for a fraction of the cost to avoid submitting the security deposit. The good news is the deposit can be refunded or the bond can be waived after 3 years by the Board. The bond does have a cancellation period of 30 days.
Montgomery Water Works
2000 Interstate Park Dr
Montgomery, AL 36109
334-206-1600
Piedmont Utilities
Piedmont Power and Piedmont Water Works, Gas and Sewer utilities provide such services to the citizens and businesses of Piedmont, Alabama. Commercial and Industrial customers are required to post a security deposit in full that is equal to 2 months estimated usage or they can pay a small surety bond premium to Jet. The security deposit amount may be reviewed and revised by the mayor or any superintendent at any time. When the need for the bond to end occurs, Jet will cancel the bond with Piedmont and Jet will be released from liability after 30 days.
City of Piedmont
109 North Center Ave
Piedmont, AL 26272
256-447-3580
Piedmont Water Works, Gas and Sewer
128 South Center Ave
Piedmont, AL 36272
256-447-3560
North Alabama Electric Cooperative
The North Alabama Electric Cooperative provides electricity along with internet, TV, and phone services to Jackson and Marshall County. For businesses, a security deposit can be avoided by purchasing a surety bond with Jet. The security deposit or bond limit needs to be the greater amount of $200 or 2 months usage. The $200 option is too small of a security deposit to constitute purchasing a bond, but if the required deposit is in the thousands of dollars, then you can opt to pay a small premium with Jet in the hundreds of dollars. The bond will remain active even after cancellation is requested for 30 days with the Cooperative.
North Alabama Electric Cooperative
41103 US HWY 72
Stevenson, AL 35772
256-437-2281
Riviera Utilities
South Baldwin County businesses receive electric, gas, water, and wastewater services from Riviera Utilities. A security deposit is required for businesses in an amount that is 2x the average monthly bill. For new services, you should call to confirm Riviera Utilities' estimated amount. You do have the option to purchase a surety bond in lieu of the deposit for a fraction of the cost. Riviera Utility has the option to cancel the need for the deposit or bond or can increase the amount deposited to 2x the highest monthly electric bill with a 15-day notice. Jet may cancel the bond with a 30-day notice to the utility company.
City of Foley dba Riviera Utilities
413 East Laurel Ave.
Foley, AL 36535
251-943-5001
Sand Mountain Electric Cooperative
Electrical services to parts of DeKalb, Jackson, Marshall, and Cherokee County in Alabama are provided by Sand Mountain Electric Cooperative. Businesses can either submit a security deposit equal to 2x the average monthly bill or purchase a surety bond for a percentage of that amount. The Cooperative can cancel the requirement or increase the deposit amount to 2x the highest monthly bill with a 15-day notice. The bond has a 30-day cancellation period following a notice provided from Jet to Cooperative.
Sand Mountain Electric Cooperative
PO Box 277
Rainsville, AL 35986
256-625-2153
Scottsboro Electric Power Board
Businesses can obtain a surety bond in lieu of a security deposit for electrical services from the Scottsboro Electric Power Board. You will need to contact the Board to learn the amount of the deposit required and let Jet know that amount during the application for the surety bond. We have a bond form ready to go for filing purposes that we will submit for you. The bond has a 30-day cancellation period with the Board.
Scottsboro Electric Power Board
PO Box 550
Scottsboro, AL 35768
256-574-2680
Spire Inc.
Alabama Gas Corporation became part of what is now Spire Inc., which provides natural gas to Alabama, Mississippi, and Missouri. Commercial and industrial businesses must provide a security deposit in an amount equal to 2x the average monthly bill. For steeper priced natural gas security deposits, a surety bond is a great option to avoid tying up a large sum in a security deposit. Spire can, at their discretion, raise the deposit amount to 2x the highest monthly electric bill or release the requirement. The bond can be cancelled with Spire following a 30-day cancellation period after they receive that cancellation notice from Jet.
Spire, Inc.
Attn: Billing Department
20 South 20th St
Birmingham, AL 35233
800-292-4008
Water Works and Sewer Board of the City of Birmingham
Birmingham Water Works Board requires businesses in Birmingham to submit a security deposit bond in order to receive service. The deposit needs to be in the amount of 3 months’ prior consumption, which can vary. The deposit amount may need to be revised from time to time as usage changes. A surety bond can be purchased in lieu of the bond for a fraction of the amount and will have less flux in regards to managing the deposit. Unless there is a great decrease or increase in the amount of the deposit, you will not have to worry about it. Should the need arise or service be cancelled the bond can be cancelled following a 30-day period.
Birmingham Water Works and Sewer Board
PO Box 830269
Birmingham, AL 35283
205-244-4000
How Does the Application Process Work With Jet for Alabama Utility Deposit Bonds?
You can start and finish the process in minutes online. You will need to know what security deposit amount is required as that is the bond limit Jet will need to submit to the utility company. Also, Jet does require a credit check of the business owner, so we will need their social security number during the application. Don’t worry as it is a soft check that will not affect the credit score.
The purchase screen will allow you to select a term on the bond, as you may want a multi-year term bond, which provides some savings. Following payment, you will receive a copy of the bond and receipt.
APPLY FOR A UTILITY DEPOSIT BOND
How Does the Utility Deposit Bond Get Filed to the Utility Company?
Jet will take care of the bond filing for you to the specific utility company requiring the bond. The addresses in the list above serve as the destination for the signed and sealed bond form (unless we are able to efficiently email the completed form).
Should you want to deliver the bond yourself to the utility company, just let us know and we will send it directly to you prepared for filing.
Can I Cancel My Utility Deposit Bond and Get a Refund?
With Jet, you can! Just send us a written request and we will then send a cancellation notice to the utility company. As stated in our breakdown of each utility company, there exists a cancellation period wherein the bond remains active for a given period of time before the obligee releases it.
Jet will send a prorated refund of the premium paid following the end of the cancellation period for any time left on the bond. Some bonds have 90-day cancellations periods, so you may have to be patient for the return.
Should the bond be cancelled and you are planning on continuing service, you must either then supply a security deposit or another surety bond to the utility company. Unless of course, the utility company has allowed you to operate without one, which is a stellar option indeed.
Does the Utility Deposit Bond Stay in Place Like the Security Deposit?
Yes, with one caveat. Jet will require you to renew the bond after the term of the bond ends. Unlike a security deposit, which just sits there, Jet charges a small fraction of the deposit while promising to make full payment to the utility (should you not). That promise comes with a price and it needs to be renewed with Jet as long as you require the surety bond to be in place.
What Happens if My Security Deposit Amount Is Revised by the Utility Company?
Let us know immediately so we can get you into compliance with the utility company. Jet can file the revised bond or appropriate bond rider to the utility once we receive additional premium, which will be just a small prorated premium amount. Conversely, if the security deposit decreases, you will receive a small refund.
How Does a Principal Avoid Alabama Utility Bond Claims?
Simply pay your utility bill on time and you will not have any issues with your utility company. Know what the late payment terms are and at least stay within them. Your utility will give you notice before shut off and will attempt to collect. If collection has failed, the utility will place a claim on the bond and shut off service (in no particular order).
What Happens if I Get a Utility Deposit Bond Claim?
Chances are a bond claim happened because you went out of business unexpectedly. The electrical, gas, or water service will be turned off if there is a bond claim, so you most likely are not in business until the bond or security deposit is active or in place again.
Once Jet, or any surety company, makes payment to the obligee for the missed payments, then you are going to be expected to pay Jet or the surety company back. This is the same as if the utility company uses part of the security deposit. You can get service back once you have filled the security deposit back up again.
Be forewarned, that many utilities may increase the amount of the security deposit if late payments are frequent or if you have services turned on again after payment issues. Consequently, the surety bond premium will increase in conjunction with the security deposit amount required, or worse, a surety company may not offer bonding anymore and you will have to submit the security deposit in full to the utility company.
