The National Energy Retail Rules prescribe what rules retailers must comply with when requesting a security deposit.
The rules surrounding security deposits may not apply if you have signed a negotiated retail contract with your provider. Information about security deposits (if charged) will be included in your contract. Security deposits are usually not required when a direct debit facility has been established with your retailer.
Residential customers who accept a payment plan offered by their Provider are not required to pay a security deposit unless they fail to pay an instalment.
A customer’s electricity or gas supply can be disconnected for non-payment of a security deposit. Re-energisation may be declined by the Provider until the security deposit is paid.
EWON does not set the amount of any security deposits you may be charged. We can only investigate whether your electricity and gas provider has applied the deposit or refund correctly.
What is a security deposit?
A security deposit is an amount of money an electricity or gas provider 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 provider for further information.
Security deposits are usually refunded once you have established a satisfactory payment history with a provider. In NSW, electricity and gas companies are required to pay interest on security deposits at the current bank bill rate.
When can it be applied?
- Household customers: a security deposit is usually only required if a new customer
- has a debt to any provider and has refused to make an arrangement to repay the debt, or
- has illegally reconnected themselves in the previous two years, or
- has initially consumed energy without opening an account with a retailer
- cannot demonstrate a good credit record with any energy provider and does not agree to an alternative payment method (for example, direct debit or Centrepay)
- an electricity or gas provider 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 provider, or
- is a new business, or
- has illegally reconnected themselves within the previous two years.
- has regularly paid bills after the due date.
Decision to Request a Security Deposit
When deciding whether to require a security deposit from a small residential or business customer a Provider can request the customer to provide them with:
- Permission to obtain a credit check of the credit history of the customer
- other information relating to the credit history of the customer
The Provider can consider:
- any credit history obtained as a result of the credit check
- any other available information relating to the credit history of the customer that is reasonably required for the Provider to assess the ability of the customer to meet their financial obligations under a customer retail contract
- whether a customer has provided satisfactory information to confirm their identity
How much is it?
The National Energy Retail Rules indicate that the maximum allowable amounts for security deposits is 37.5% of a customer’s estimated bills over a 12 month period, based on:
- the customer’s billing history
- the average use of energy by a comparable customer over a comparable 12 month period.
Reductions and exemptions may also be available for customers receiving Centrelink benefits. Contact your electricity or gas provider 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 payment due date of the first bill. Small business customers have to accrue two years of on-time payment, but repayment may be withheld if the Provider does not consider that the business has a satisfactory credit rating.
- Security deposits are also returned when a customer notifies their Provider that they are vacating the premises and/or request de-energisation of the site, where the security deposit, or any part of it, is not required in settlement of the final bill.
Inform your Provider about whether you prefer to have the deposit returned to you by cheque or direct deposit into your bank account.
For either (a) or (b) above, the deposit amount must be credited to your electricity or gas account, or paid to you directly, within 10 business days.
