North Carolina Public Utility Service Provider Bond

North Carolina Public Utility Service Provider Bond

The North Carolina Utilities Commission (NCUC) requires any public utility company providing water or sewer services to first post a Public Utility Service Provider Bond of no less than $10,000 in value. The bond from Jet Insurance Company serves as a financial guarantee for the utility company protecting NCUC in a case where the utility company fails to provide adequate service to the public, and an emergency operator is hired in its stead. 

PURCHASE PUBLIC UTILITY SERVICE PROVIDER BOND

When you purchase your bond with Jet, you can buy at a low annual rate or take advantage of our exclusive monthly payment plan. At Jet, we are cutting out the middlemen who slow down the process and can cost you more in the form of fees and commissions.

What Is the Lowest Price for the Public Utility Service Provider Bond?

With Jet, the Water and Wastewater Public Utility Bond can cost as low as 1% of the bond amount or limit. In underwriting the bond, the Jet team will take the personal credit and the financial strength of the utility provider into account to decide eligibility and price of the bond.

When you buy your bond with Jet, you are working with the direct carrier of your bond. We are with you from application and bond filing, all the way through renewals and responding to claims (should they come up).

How Is the Public Utility Service Provider Bond Limit Determined?

The bond limit per the NCUC rules shall be no less than $10,000, and will ultimately be determined by the NCUC. The NCUC rules require the commission to consider the following factors in determining the bond amount for any prospective utility provider:

  1. Whether the applicant holds other water or sewer franchises in this State, and if so its record of operation
  2. The number of customers the applicant now serves and proposes to serve
  3. The likelihood of future expansion needs of the service
  4. If the applicant is acquiring an existing company, the age, condition and type of the equipment
  5. Any other relevant factors, including the design of the system
  6. In the case of a contiguous extension, both the original service area and the proposed extension

What Is the Purpose of the Public Utility Service Provider Bond?

The Public Utility Service Provider Bond, pursuant to North Carolina General Statutes 62-110.3, exists as a financial guarantee from a third party surety (Jet) to the NCUC, ensuring they are reimbursed in the event that they are required to deploy an emergency operator to maintain water or sewer services. 

This could result from a utility company going out of business, or by violating North Carolina statutes and being forced by court order to defer to an emergency operator. An emergency operator could be another utility operator licensed to provide water or sewer services in the state.

The North Carolina Utilities Commission regulates rates and services for investor-owned public utilities in the state. Among its many responsibilities, the NCUC is chartered to “promote adequate, reliable, and economical utility service” for the people of North Carolina. The Public Utility Service Provider Bond provides a means by which the NCUC can ensure reliable operation of water and sewer services, by being able to quickly source additional funding for a failing utility company.

How Does the Application Process Work With Jet?

Jet makes the application process for the Public Utility Service Provider Bond painless, to get you back to your business as quickly as possible. You will be asked to fill out your basic information, including some information about your business. After that, the Jet team will conduct a short review of the application and get back to you with a quote for your bond. In some cases we may require more information regarding experience and financial stability of the utility company.

Once you have purchased your bond and signed the necessary forms, an electronic version will be made available to you immediately. The original will be mailed to the address you provide, so that you can file with NCUC.

How Does the Public Utility Service Provider Bond Get Filed With NCUC?

Jet cannot file the bond directly with NCUC for you, due to requirements in the NCUC rules. When you buy the Public Utility Service Provider Bond with Jet, we will complete the original bond and send it directly to you. The bond requires the original bond form, an original signed copy of your Power of Attorney, as well as an original Commitment Letter, Jet will take care of the bond on our end and mail it to you without any shipping fees. 

You will need to send the original bond, Power of Attorney, and original commitment letter directly to the NC Utilities Commission (along with your application) at the following address:

North Carolina Utilities Commission
4325 Mail Service Center
Raleigh, NC 27699-4325

Can I Cancel My Public Utility Service Provider Bond and Get a Refund?

You can with Jet! If you need to cancel your Public Utility Service Provider Bond, you will receive a refund for any unearned premium on the remainder of your term. While other companies use early cancellation to hold onto broker fees and add cancellation fees, Jet will only account for the time that is used on the bond. Any unearned premium will be refunded to you. 

Refunds are not available however for monthly payment plans; your payments continue until the final month that the bond is active. When you request a cancellation, Jet will stop all recurring payments 60 days after sending a cancellation notice to the NCUC. 

When the NCUC receives a notice of cancellation, the bond will remain in force for another 60 days. This period must be factored into your cancellation with Jet, meaning that additional payments may be required on the monthly payment plan or that time will be included in the time used on the bond.

How Does the Public Utility Service Provider Bond Renew?

The NCUC requires the Public Utility Service Provider Bond to be annually renewed on or before April 30th of each year, along with an Annual Report, which is described in the Commission Rules. See the following excerpt from the Commission Rules: 

“The company shall attach a separate notarized statement to its annual report which is due on or before April 30th of each year stating the amount of the bond, whether the bond is still in effect, and the date of next renewal.”

Jet will send you renewal reminders both via email and mail at your business address months before your renewal date with NCUC. If you have opted for our monthly payment plan, your bond will remain in effect as long as the automatic payments from your bank account on file continue. You will still be required to submit the notarized letter and annual report as prescribed by the NCUC.

PURCHASE PUBLIC UTILITY SERVICE PROVIDER BOND

How to Avoid Claims on the Public Utility Service Provider Bond

In order to avoid having the Public Utility Service Provider Bond converted to cash to reimburse the NCUC, the principal (the utility company) must operate the water or sewer utility reliably and legally, in accordance with North Carolina General Statutes Chapter 62, as well as the NCUC Rules Chapters 7 and 10.

It is important to also note that the Commission Rules stipulate that penalties and fees can also be claimed against the bond.

What Happens if I Get a Bond Claim?

If you receive a claim against your bond, Jet will investigate the claim from the NCUC to assess the claim’s validity. You will need to provide Jet with any evidence pertinent to the claim.

If the claim is found valid, Jet will pay the claim up to the bonding amount. However, you are responsible as the bond holder, and are still obligated to pay Jet back for the amount of the claim. 

In the event that you wish to restore your company as a utility provider following the appointment of an emergency operator, you will need to post a new surety bond, with a newly assessed bond value, approved by the NCUC. This can prove difficult if you have failed to rectify the situation that previously led to the bond claim and have not made recompense to the surety company.

North Carolina Public Utility Service Provider Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: