Can Electric Companies Turn Off Power for the Deposit?

Electric companies all have a different method to tally your deposit. For example, with Southern Company electric, the deposit amount is twice the average monthly bill of the residence, up to $150. Southern California Edison also estimates a deposit as twice the average monthly bill for a residence. Electricity deposits can be expensive, depending on the provider, and can even as much as $500. In some states, like Pennsylvania, the electricity market is deregulated, so high deposits are rarer than they used to be. Most Pennsylvania electric companies will still ask you for a deposit if you have poor credit or poor payment history, but you may have the option to prepay for your service instead.

Prepaid electricity service is an option for households experiencing a difficult financial time and cannot pay their old electric bills, or afford a new deposit. Doing business with a prepaid electric service may not be in your best interest, however, according to Sally Simmons of Sparky Energy. Read your prepaid electric service contract carefully before signing or paying any money. Prepaid electric services may offer a very low fee to get your power turned on quickly, but then charge extremely high rates thereafter.

Avoid future electric company deposits by paying your bill in full and on time. SCE says you can also avoid deposits by providing a letter of credit from another electric service, or by providing a guarantor for your account. A guarantor is someone who is responsible for paying your bill if you are unable, similar to a co-signer on a loan. If you are experiencing financial hardship, contact your electric company and explain your situation. Most are willing to work with you on a payment plan, because they would rather receive money owed over a longer period of time than risk never getting paid at all.

Depending on your location, age and income you may qualify for assistance paying your electric bill. California residents have access to numerous plans such as the Family Electric Rate Assistance program and emergency cash assistance programs. Contact the California Public Utilities Commission for information about these services, or assistance with negotiating electric bill payments or electric service deposits in California.