Residential Customer Deposits Policies

Residential Customer Deposits

A: SMECO may require a current or former residential customer to re-establish credit if one of the following conditions exist, per COMAR

  • The member owes an outstanding bill for a prior residential service;
  • the member’s residential account has been terminated within the last 12 months due to nonpayment of a bill;
  • the member failed to pay a residential bill by its due date on more than 2 occasions in the prior 12 months of service;
  • the residential account is more than 2 months in arrears; or
  • conditions of service or the basis on which the member’s credit was established have materially changed.

B: A residential customer 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, provided that any prior deposit paid by the customer has been refunded.

New Applicants

New applicants for residential service will be required to establish credit with the co-op or pay a customer deposit. A new customer may establish credit by providing proof of all of the following:

  • the applicant was a customer of a utility within the past 2 years;
  • the applicant does not currently have any outstanding bills for utility service to any utility;
  • the applicant did not have service discontinued for nonpayment of a utility bill during the last 12 months that service was provided;
  • the applicant did not, on more than 2 occasions during the last 12 months that service was provided, fail to pay a utility bill when the bill became due (This information can be obtained from your previous utility by requesting a letter of credit)

If an applicant does not show good paying habits and cannot establish credit satisfactorily, then a deposit will be required. The deposit will not be less than $50 nor more than 2/12 of the estimated charge for service in the upcoming 12 months. If a customer’s actual bills differ greatly from the estimated charge for service, then the amount of the deposit will be adjusted accordingly.

Deposits of $150 or less may be paid in installments over a period of at least 8 weeks. Deposits of more than $150 may be paid over a period of at least 12 weeks. Members will be informed of these payment options at the time the deposit is required.

SMECO will pay interest on customer deposits. Interest rates change on the first of each year; call SMECO for the current rate. Once a year, a customer 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 credited to the account or refunded.

A residential deposit plus accrued interest will be refunded after the first 16 months of service, or 12 months after the deposit has been paid in full if the customer:

  • Has not had service turned off for nonpayment of a bill; and
  • Has not had more than 2 past due bills; and
  • Has not had a returned payment; and
  • The account is not past due

If the customer does not meet these conditions, the deposit will be retained. The PSC requires SMECO to review the account each year and to refund the deposit plus accrued interest as soon as the conditions have been met.

SMECO will refund the deposit plus interest of a customer who is 60 years old or older, provided the customer:

  • Requests refund of the deposit;
  • Presents satisfactory proof of age; and
  • Does not owe a past due bill or an uncollected bill to SMECO

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