Ontario Energy Board regulates security deposits

- The Ontario Energy Board has laid out new rules under which electric utilities in the province can require customers to pay a security deposit.

Until now, there hasn't been any consistent rules across the province about security deposits and those policies were left up to Ontario's individual electric utilities, said Donna Garant, a spokeswoman for the Ontario Energy Board.

There's no requirement for electricity distribution companies to demand security deposits from some customers, but the new rules spell out when a utility can ask for a security deposit, how much can be charged, when it must be paid back, and the interest the customer must receive.

The new rules cover residential, commercial and industrial customers.

Under the regulations, an electricity distributor can require a security deposit if a customer has received more than one disconnection notice, if a cheque or pre-authorized payment has bounced or if the hydro has been disconnected because of overdue bills.

The maximum security deposit allowed is 2.5 times a customer's average monthly bill and interest on that amount must be paid out at least once every 12 months.

However, residential customers with a good payment history of one year or more don't have to pay a security deposit and will get their deposit refunded, the board said.

"In some cases, security deposits currently held by electricity distributors will be returned to consumers as a result of the amendments," the energy board said in a release.

The good payment history requirement is longer for both commercial and industrial consumers.

New customers can be exempt from paying a deposit by providing a reference letter confirming their good payment standing with their previous utility or by paying to send the utility a credit check.

Electricity distributors have six months to implement the changes to their security deposit policies and have until Feb. 1, 2005 to deal with other changes such as deposit repayments.