The Independent Pricing and Regulatory Tribunal (IPART) decides what electricity, gas and water companies can charge their customers. As well as tariffs and service availability charges, IPART regulates security deposits.
The rules surrounding security deposits do not apply if you have signed a negotiated retail contract with your supplier. Information about security deposits (if charged) will be included in your contract.
What is a security deposit?
A security deposit is an amount of money an electricity or gas supplier may request when you establish a new account.
Water accounts are usually in the name of the property owner so a security deposit is not usually required. Contact your water supplier for further information.
Security deposits are usually refunded once you have established a satisfactory payment history with a supplier. In NSW, electricity and gas companies do not pay interest on security deposits.
When can it be applied?
- Household customers: a security deposit is usually only required if a new customer
- has a debt to any supplier and has refused to make an arrangement to repay the debt, or
- has illegally reconnected themselves in the previous two years, or
- cannot demonstrate a good credit record with any energy supplier and does not agree to an alternative payment method (for example, direct debit or Centrepay)
- an electricity or gas supplier cannot levy a security deposit after agreeing to waive it at the time of connection.
- Small business customers: a security deposit can only be requested prior to connection, and only if the customer:
- does not have a good record with any energy supplier, or
- is a new business, or
- has illegally reconnected themselves within the previous two years.
How much is it?
IPART has set the maximum allowable amounts for security deposits at:
- 1.5 times the average quarterly account
- 1.75 times the average bi-monthly account
- 2.5 times the average monthly account
Security deposits differ according to your supplier. Reductions and exemptions may also be available for pensioners. Contact your electricity or gas supplier for further information.
When is the deposit returned?
Security deposits held for household customers must be repaid if all bills are paid on time for a period of one year after the date of the first bill. Small business customers have to accrue two years of on-time payment, but repayment may be withheld if the supplier does not believe that the business has a satisfactory credit rating.
The supplier must inform you in writing if your deposit is due to be returned. The supplier must then apply a credit to your electricity or gas account within 10 business days.
Speak with your supplier if you would prefer to have the deposit returned to you by cheque or direct deposit into you bank account.If not refunded earlier, your security deposit must be returned if you close your electricity or gas account. The supplier will write to you with details of the amount held. The deposit amount must then be credited to your electricity or gas account, or paid you directly within 10 business days.