Mississippi Utility Deposit Bond

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Mississippi Utility Deposit Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Mississippi Utility Deposit bond.

At a Glance:

  • Average Cost: Between 2% to 7.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: Determined on a case-by-case basis
  • Who Needs it: Certain individuals and businesses that do not want to pay a cash deposit to activate utility services
  • Purpose: To ensure utility companies receive compensation for financial harm if the business fails to pay their utility bills
  • Who Requires Utility Deposit Bonds in Mississippi: Utility companies that provide services to the general public
Mississippi Utility Deposit Bond Form
Mississippi Utility Deposit Bond Form

Background

Utility companies in Mississippi often require customers expected to generate large monthly bills to pay a security deposit before initiating service. The security deposit protects utility companies from losses if the consumer fails to pay their monthly bills on time and in full. However, certain utility companies in Mississippi allow customers to purchase and maintain a surety bond in lieu of depositing cash. Unlike most surety bonds, utility deposit bonds are not required by a government agency but by the utility company providing the service (unless a municipality owns the utility company).

What is the Purpose of the Mississippi Utility Deposit Bond?

Certain utility companies in Mississippi require consumers that do not wish to pay a security deposit to purchase a surety bond as a prerequisite to obtaining utility services. The bond ensures that the utility company will receive compensation for financial harm if the consumer fails to comply with the provisions laid out in the bond form. Specifically, the bond protects the utility company if the consumer does not pay their monthly bills. In short, the bond is a type of insurance that protects utility companies if the consumer fails to remit all required payments.

How Can an Insurance Agent Obtain a Mississippi Utility Deposit Surety Bond?

BondExchange makes obtaining a Mississippi Utility Deposit bond easy. Simply login to your account and use our keyword search to find the “utility” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Mississippi Utility Deposit Bond?

Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Mississippi Utility Deposit bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Mississippi Utility Deposit Bond Cost?

A Mississippi Utility Deposit bond can cost anywhere between 2% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors, including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.

$10,000 Utility Deposit Bond Cost

Credit Score* Bond Cost (1 year) Bond Cost (1 month)
800+ $200 $20
650 – 799 $500 $50
600 – 649 $750 $75

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Mississippi Utility Deposit Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

Which Companies Allow Utility Deposit Bonds in Mississippi?

The following Mississippi utility companies allow customers to purchase a surety bond in lieu of depositing cash:

4-County Electric Power Association

Commercial customers are required to purchase a surety bond or deposit cash before initiating service. The bond amount will either equal two months of estimated billing or twice the location’s highest monthly bill on record, based on the discretion of the Association.

Agents can contact the 4-County Electric Power Association here.

 Alcorn County Electric Power Association (ACE Power)

Commercial and industrial customers must either purchase a surety bond or deposit cash in an amount equal to twice the location’s actual or estimated monthly bill.

Agents can contact ACE Power here.

Atmos Energy

High-use customers must either deposit cash or purchase a surety bond in an amount determined by Atmos.

Agents can contact Atmos Energy here.

Coast Electric Power Association

Non-residential customers are required either purchase a surety bond or deposit cash. The bond amount must equal two and a half months of estimated billings.

Agents can contact Coast Electric Power Association here.

Columbus Light and Water Department

Commercial customers must purchase a surety bond or deposit cash before initiating service. The bond amount must equal twice the location’s actual or estimated highest monthly bill during a 12-month period.

Agents can contact Columbus Light and Water Department here.

Corinth Gas and Water Department

Commercial customers are required to purchase a surety bond or deposit cash before receiving service. Bond/deposit amount can be calculated here.

Agents can contact Corinth Gas and Water Department here.

East Mississippi Power Association (EMEPA)

Commercial and industrial customers must purchase a surety bond or deposit cash. The bond amount is twice the customer’s estimated kilowatt usage.

Agents can contact EMEPA here.

Entergy Mississippi

High-use commercial customers may opt to purchase a surety bond instead of depositing cash. The required bond amount is determined on a case-by-case basis based on the location’s square footage and the estimated equipment to be used.

Agents can contact Entergy Mississippi here.

Mississippi Power Company

High-use commercial customers must either deposit cash or purchase a surety bond. The bond amount is determined by the company on a case-by-case basis.

Agents can contact the Mississippi Power Company here.

Pearl River Valley Electric Power Association

Non-residential customers may choose to purchase a surety bond instead of depositing cash. The bond amount is determined on a case-by-case basis based on the customer’s estimated usage.

Agents can contact Pearl River Valley Electric Power Association here.

Prentiss County Electric Power Association

Commercial customers must either purchase a surety bond or deposit cash in an amount equal to the location’s two highest consecutive monthly bills (actual or estimated).

Agents can contact Prentiss County Electric Power Association here.

Oxford Utilities

Commercial and industrial customers are required to either purchase a surety bond or deposit cash. The bond amount must equal twice the location’s estimated average monthly bill.

Agents can contact Oxford Utilities here.

Southwest Mississippi Electric Power Association

Commercial customers must either purchase a surety bond or deposit cash. The bond amount is determined on a case-by-case basis based on the customer’s estimated usage.

Agents can contact Southwest Mississippi Electric Power Association here.

Spire Energy

Commercial customers must either deposit cash or purchase a surety bond in an amount determined by the company.

Agents can contact Spire Energy here.

Starkville Utilities

Commercial customers must either deposit cash or purchase a surety bond before initiating service. The bond amount must equal twice the location’s actual or estimated highest bill over a 12-month period.

Agents can contact Starkville Utilities here.

Tallahatchie Valley Electric Power Association (TVEPA)

Commercial customers are required to either purchase a surety bond or deposit cash. The bond amount is determined on a case-by-case basis based on the customer’s estimated usage.

Agents can contact TVEPA here.

Tishomingo County Electric Power Association (TCEPA)

General power customers must either purchase a surety bond or deposit cash before initiating service. The bond amount must equal twice the location’s actual, or estimated if a new construction, monthly bill.

Agents can contact TCEPA here.

Tombigbee Electric Power Association (Tombigbee EPA)

Commercial customers may opt to purchase a surety bond instead of depositing cash. The bond/deposit amount is calculated on a tiered structure, as outlined on page 10 of the Association’s Service Practice Policies.

Agents can contact Tombigbee EPA here.

Tupelo Water & Light

General power customers must purchase a surety bond or deposit cash before initiating service. The bond amount must equal twice the location’s actual or estimated average monthly bill. The bond amount may be increased to twice the highest estimated monthly bill at the discretion of Tupelo Water & Light.

Agents can contact Tupelo Water & Light here.

Vicksburg Water and Gas Office

High-use businesses may opt to purchase a surety bond instead of depositing cash. The bond amount is determined by the Office on a case-by-case basis.

Agents can contact the Vicksburg Water and Gas Office here.

Yazoo Valley Electric Power Association

Commercial customers must either purchase a surety bond or deposit cash before receiving service. The bond amount is determined by the Association on a case-by-case basis based on the location’s past usage or load projections.

Agents can contact Yazoo Valley Electric Power Association here.

How Do Mississippi Utility Customers File Their Bonds?

Utility customers in Mississippi should submit their completed bond forms, including the power of attorney, to the company requiring the bond. The surety bond requires signatures from both the surety company that issues the bond and from the customer. In some instances, the bond will require witness signatures as well. Generally, the surety company will include the following information on the bond form:

  • Name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Entity requiring the bond
  • Bond amount
  • Date the bond is signed
  • Date the bond goes into effect

What Can Utility Customers in Mississippi Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, utility customers in Mississippi must ensure they pay their utility bills on time and in full.

What Other Insurance Products Can Agents Offer Utility Customers in Mississippi?

Utility companies generally only require businesses to be bonded. As such, agents can offer their customers general business and liability insurance in addition to the utility deposit bond. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

Should Your Customer Purchase a Surety Bond or Deposit Cash?

Surety bonds are generally considered the better option for businesses, as they free up working capital that would otherwise have to be deposited with the utility company. For more information on whether your customer should purchase a bond or deposit cash, check out our Surety Bonds vs. Letters of Credit article here.

Mississippi Utility Deposit Bond