Electric Service Fees

[MattsPrincess]

We just signed the lease on a new apartment, move in a week from today. We have to have the electric in our name and turned on 24 hours before move in. Last night I went to set up the account, with the only company we're allowed to use.

After putting in the address and all that, it said we have to pay a deposit of $425, plus a $30 connection fee to start our service! I thought that seemed a *bit* unreasonable. We called the electric company and they said the deposit is two times the average monthly bill. We called the apartment manager today to ask if the average bill is really in the 200 a month range, and if everyone has to pay that large of a deposit. He said NO! He has a larger apartment in the same complex and doesn't pay nearly that much. He said the previous renter of our specific apartment must have been either very wasteful, or not paid their bills.

Is there anything we can do? That's an insane deposit and we're already struggling as it is. We were expecting $20-50. Does anyone have experience with something like this? I know the electric company has it's regulations and all, but it just doesn't seem fair that we have to pay for someone stranger's wastefulness or irresponsibility. Do you think there's any chance of getting it lowered, especially if it's not the norm for the complex?

 

[HM]

The only thing I can suggest is showing the company your previous electric bills from your prior apartment to show them that you use less than $200 a month and see if they'll revise it down based on that. And maybe solicit the manager to contact them with the fact that he pays less and has a larger place.

 

[nkereina]

I don't know about where you live, but for here, the only time you have to put down a deposit for utilities is if you have bad or no credit. Is that the case? If so, I don't think you can avoid the deposit and it's unfortunate that they base it on twice the average monthly bill. Do they just hold the deposit forever until you move or switch electric companies? Or do they eventually take your payment from it?

That's also a negative about budget billing if you choose to sign up for that - it will be high the first few months based on the prior tenant's usage before it evens out to yours. Like it does with budget billing, perhaps you could ask the electric company if they could adjust the deposit and apply it to your account after they determine what it is that you ARE spending in usage? It would still suck to put down that much money up front, but maybe they'd be agreeable to applying some of the excess to your bill.

Good luck!

 

[scrapquitler]

We just signed the lease on a new apartment, move in a week from today. We have to have the electric in our name and turned on 24 hours before move in. Last night I went to set up the account, with the only company we're allowed to use.

After putting in the address and all that, it said we have to pay a deposit of $425, plus a $30 connection fee to start our service! I thought that seemed a *bit* unreasonable. We called the electric company and they said the deposit is two times the average monthly bill. We called the apartment manager today to ask if the average bill is really in the 200 a month range, and if everyone has to pay that large of a deposit. He said NO! He has a larger apartment in the same complex and doesn't pay nearly that much. He said the previous renter of our specific apartment must have been either very wasteful, or not paid their bills.

Is there anything we can do? That's an insane deposit and we're already struggling as it is. We were expecting $20-50. Does anyone have experience with something like this? I know the electric company has it's regulations and all, but it just doesn't seem fair that we have to pay for someone stranger's wastefulness or irresponsibility. Do you think there's any chance of getting it lowered, especially if it's not the norm for the complex?

We have a municipal electric company where I live, and they routinely ask for a deposit equal to 2 months of the previous tenant or owers average bill. If you pay your bill on time every month for a year, they return the deposit to you.

I freaked out when that happened when we moved here because I just didn't have a bunch of extra cash around that I wanted tied up like that, so I called them and asked if there was an option, and I found out that if I got a letter sent to them from the utility company where we previously lived stating that I always paid on time then they would waive the deposit, so I did that. Maybe your utility would offer you the same option?

As for the connection fee, I would expect that, and I as much as I don't like it, I would consider $30 as 'reasonable'. At least when you do the electric switch over, they have to come out and read the meter (unless you have smart meter), sot hey are doing SOMETHING. When we moved our phone company charged us $90 to move our service from on location in the same town to another, and there was no physical thing they had to do on site or anything. It was annoying, but what choice was there?

 

[ronandannette]

This may be a long shot, but our utilities here can be paid by direct-debit from either a bank account or credit card. Maybe if you signed up for that and the payment was guaranteed to be made on time they could look at reducing or waiving it?

 

[lauradis]

Call back and ask for a supervisor. Explain nicely what you have explained to us and ask if that is a normal deposit for all the apartments in the area, because it seems high.

worst that can happen is they say yep, pay us $455, now.. ask what the return policy is or if you get interest every year etc.

 

[Mizzoufan]

That's pretty standard in my area.

 

[mousehockey37]

I'd call and get a supervisor. There's no way that since you are a NEW resident that they can base a deposit off of the OLD resident. That's a rather shady business practice in my opinion. If that doesn't work, see how long it's going to take for the bill to even out and maybe work it out with the property manager that s/he can bring your rent down some until the electric bill comes down. If they're agreeing that it's outrageous, and the electric company won't work with you, the landlord is still going to want your business. Also, don't most, if not all, apt complexes require that when you move out, that you put the electric back in their name?

Something's not right there and I'd put up a formal protest with the BBB and look really quick into having someone investigate it.

 

[Mizzoufan]

I'd call and get a supervisor. There's no way that since you are a NEW resident that they can base a deposit off of the OLD resident. That's a rather shady business practice in my opinion. If that doesn't work, see how long it's going to take for the bill to even out and maybe work it out with the property manager that s/he can bring your rent down some until the electric bill comes down. If they're agreeing that it's outrageous, and the electric company won't work with you, the landlord is still going to want your business. Also, don't most, if not all, apt complexes require that when you move out, that you put the electric back in their name?

Something's not right there and I'd put up a formal protest with the BBB and look really quick into having someone investigate it.

Why is it shady?

 

[Mizzoufan]

This is from my local electric company.

The Public Service Commission for each state establishes the deposit and fees policy for that state. They also regulate the fee amounts and deposit interest rate. The following is a description by state of these policies.

ArkansasKansasMissouriOklahoma
Residential Deposit

A deposit may be waived for a new Customer if:

• The Customer can supply the Company with a Good letter of credit (no more than 5 late pays in last 12 months)
• A qualified Guarantor signs for the Customer
• The Customer has been employed full time for one year and has an adequate regular source of income
• The Customer owns or is purchasing a home

If a deposit is required, it will be equal to 2 times average monthly charge for the specific premise unless:

• The Customer has outstanding debt with Company
• The Customer had poor previous payment history with Company
• If the Customer has tampered with service, with our Company or any other utility company in the last 5 years

If any of these apply, the Company may require 2 times highest monthly charge and collect the outstanding bill.

 

[mousehockey37]

Why is it shady?

As I said, it seems shady because they hold someone else's lifestyle over your head. Once that person leaves that apartment, that account is closed to that person. The new tenant should be started fresh, and not liable for the prior tenants mess.

 

[ronandannette]

This is from my local electric company.
The Public Service Commission for each state establishes the deposit and fees policy for that state. They also regulate the fee amounts and deposit interest rate. The following is a description by state of these policies.
ArkansasKansasMissouriOklahoma
Residential Deposit
A deposit may be waived for a new Customer if:

• The Customer can supply the Company with a Good letter of credit (no more than 5 late pays in last 12 months)
• A qualified Guarantor signs for the Customer
• The Customer has been employed full time for one year and has an adequate regular source of income
• The Customer owns or is purchasing a home

If a deposit is required, it will be equal to 2 times average monthly charge for the specific premise unless:

• The Customer has outstanding debt with Company
• The Customer had poor previous payment history with Company
• If the Customer has tampered with service, with our Company or any other utility company in the last 5 years

If any of these apply, the Company may require 2 times highest monthly charge and collect the outstanding bill.

It blows me away that paying late 40% of the time can be considered "good" credit... What planet is this on?

 

[lauradis]

It blows me away that paying late 40% of the time can be considered "good" credit... What planet is this on?

On this planet where people buy the newest Iphone instead of their bills.

 

[barkley]

I'd call and get a supervisor. There's no way that since you are a NEW resident that they can base a deposit off of the OLD resident. That's a rather shady business practice in my opinion. If that doesn't work, see how long it's going to take for the bill to even out and maybe work it out with the property manager that s/he can bring your rent down some until the electric bill comes down. If they're agreeing that it's outrageous, and the electric company won't work with you, the landlord is still going to want your business. Also, don't most, if not all, apt complexes require that when you move out, that you put the electric back in their name?

Something's not right there and I'd put up a formal protest with the BBB and look really quick into having someone investigate it.

it's a very routine practice-we've experienced it with using different utility companies in different states. it's not like the utility is dinging the new owner (in our case) or tenant based on a prior owner's/tenant's poor payment history, they are basing the deposit on how much service was used for the home or unit which may or may not change with a new resident. some things like the number of people, energy conservation habits and energy efficient appliances can make a big difference in usage, but other things like lousy insulation, leaking windows and underperforming heat/cooling can cause high bills for even a single person whose away from home most of the day. utilities are paid for after the fact-after the source has been used so deposits are taken to ensure the bill is paid. some companies like the one we use hold the deposit for a set amount of time then give the option of (1) full refund, (2) full application to the next bills (until zeroed out) or (3) balanced application to the bill over a period of time chosen by the customer. our utility company charges a deposit equal to 2x the average monthly bill (using their billing records for the unit/house) but at minimum it's $250 for a single family home and $150 for multi unit dwellings.

op-you can try calling and speaking to a supervisor and see if they can look into what the average usage is for the units in the building to lower it, or see if they will take a smaller initial deposit w/ additional payments on the monthly bills to work towards their total amount required.

 

[undertheradar]

You certainly have the right to call and request a lower deposit, just be prepared if you are denied. The suggestion up thread to see if the landlord will lower the rent makes no sense. The landlord does not control the utility policies and the utility does not control the landlord's policies. Perhaps this is a complex where there is a higher percentage of delinquent accounts.

 

[msjprincess]

It blows me away that paying late 40% of the time can be considered "good" credit... What planet is this on?

I read that differently. I thought they were talking about all bills. Not 5 late payments of a specific bill. So if you have 10 bills a month, 5 late payments in a year would be less than 5%.

 

[bcla]

As I said, it seems shady because they hold someone else's lifestyle over your head. Once that person leaves that apartment, that account is closed to that person. The new tenant should be started fresh, and not liable for the prior tenants mess.

I've actually benefitted from a previous customer's high usage. We bought our house just before our local water district went to drought pricing. Everyone got a baseline for a reasonable tiered pricing scheme. It was at least 100 gallons/day, but was typically higher depending on previous usage. The house had no lawn, but the previous owner must have taken long showers and used a lot of water for gardening. We got a list of previous usage, and we would have our baseline set to a percentage of the average of the previous two years' corresponding months.

It seemed a bit absurd - almost punishing those who had moderate (but not minimal) water use in the past. It also seemed absurd that we benefitted from the previous owner's high usage.