Nonresidential Customer Deposits Policies

Nonresidential Customer Deposits

A: SMECO may require a current or former nonresidential member to re-establish credit if they meet one of the following criteria, per COMAR

  • The member owes an outstanding bill for a prior non-residential service;
  • The member’s nonresidential account has been terminated within the last 12 months due to nonpayment of a bill;
  • The member failed to pay a nonresidential bill by its due date on more than two occasions in the prior 12 months of service;
  • The nonresidential account is more than 1 month in arrears; or
  • Conditions of service or the basis on which the member’s credit was established has materially changed

B: A nonresidential member who has established credit and is receiving service but who fails to pay a bill by the expiration date of a termination of service notice, may be required by the utility to reestablish credit by depositing the amount prescribed in COMAR, in addition to paying the outstanding bill and a reasonable reconnection charge.

In addition to demonstrating good paying habits in the ways previously described for prospective residential members, prospective nonresidential members may also be required to establish credit by any one of the following methods:

  • Showing that the applicant has been actively engaged in his or her current business as a proprietorship, partnership, or corporation for at least 4 years;
  • Demonstrating creditworthiness by showing that the applicant has made payments on credit accounts when due;
  • Furnishing SMECO with a satisfactory guarantee in writing;
  • Furnishing an irrevocable commercial letter of credit or providing a surety bond acceptable to the co-op; or
  • Otherwise establishing the applicant’s credit to the co-op’s satisfaction

If an applicant is unable to establish credit under any of the methods stated, SMECO may require a cash deposit to ensure payment of a final bill. Also, a deposit may be required if the conditions of a service change or if there is a change in the method under which the applicant establishes credit.

When a deposit is required, the deposit will not be for more than the maximum estimated charge for service for 2 consecutive billing periods, or as may reasonably be required in cases involving service for short periods or special occasions. A deposit of $100 or more may be paid in installments over a period of at least 8 weeks.

SMECO will pay interest on customer deposits. Interest rates change the first of each year; call SMECO for the current rate. Once a year, a member may provide a written request to SMECO to have the interest credited to their account; otherwise, the interest will be paid when the deposit is refunded.

A nonresidential deposit plus accrued interest will be refunded after 4 years if the member:

  • Has not had service turned off for nonpayment of a bill within the last 2 years;
  • Has not, on more than 2 occasions within the last 12 months, failed to pay a bill within a reasonable time after it became due;
  • Is not behind in the payment of a bill;
  • Has not presented a check returned by the bank in payment of a bill within the last 2 years; and
  • Has not had unfavorable credit information recorded against the customer within the last 2 years

If the member does not meet these conditions at the end of the first 4 years of service, the deposit will be retained. SMECO will review the account every year and will refund the deposit plus accrued interest when the above conditions have been met.

When service is discontinued, SMECO will, within 45 days, refund the deposit plus any accrued interest in excess of the customer’s final bill. A transfer of service from one premise to another within SMECO’s service area does not entitle a customer to a refund of the deposit.