Purpose of Security Deposits
The two main purposes of a security deposit policy are as follows:
1. To protect the utility from losses incurred when accounts for electricity already consumed are not paid.
2. To encourage customers to pay accounts on time.
Security Deposit Guidelines
Waterloo North Hydro Inc. (WNH) purchases electricity and transmission services on behalf of all its customers and then recovers the cost, along with the cost of distribution, through customer billings. As customers switch to competitive retailers, and depending on the billing options chosen, the amount of exposure for WNH varies and therefore the security deposit amount will be adjusted to reflect the new level of exposure. Security deposits will be required from all non-residential customer accounts except those customers who meet the conditions outlined in the “Security Deposit Waiver Requirements”.
The form of payment of a security deposit for a non-residential customer shall be cash, cheque or an automatically renewing, irrevocable letter of credit from a bank as defined in the Bank Act, 1991, c.46 at the discretion of the customer.
Security deposits will apply equally to all customers regardless of rate classification or owner/tenant status. Service will be withheld for non-payment of deposit.
The following shall apply for each billing option:
Standard Supply Service
Under this option, WNH will continue to be responsible for issuing a bill to the customer and will continue to be responsible for customer non-payment risk. WNH may impose an amount of security deposit depending upon our assessment of the customer's likely risk of non-payment.
Distributor-Consolidated Billing
Under this option, WNH will be responsible for issuing the bill to the customer and will be responsible for customer non-payment risk. WNH may impose an amount of security deposit depending upon our assessment of the customer's likely risk of non-payment.
Retailer-Consolidated Billing
Under this option, WNH will not issue a bill to a customer. The Retailer is responsible for issuing the bill to the customer and the Retailer is responsible for customer non-payment risk. Under this billing option, WNH would not require a security deposit from the customer.
If we are in possession of a customer's security deposit at the time of a switch to retailer-consolidated billing, the security deposit, plus any accrued interest, shall be applied to the final bill, issued by WNH. Any excess amount shall be returned to the customer. The customer is still responsible to WNH for the payment of any outstanding balances on their account following the application of the security deposit to their final bill.
Split Billing
Under this option, WNH and a Retailer will each issue a bill to the customer. As such, WNH and a Retailer shall each be responsible for customer non-payment risks for the bills that each issues to the customer. If a customer already has a security deposit with WNH, we will retain a portion of the security deposit amount that reflects the non-payment risk associated with the new billing option. Any excess security deposit amount will be returned to the customer.
Security Deposit Requirements
The maximum amount of a security deposit, which WNH may require a customer to pay, shall be calculated in the following manner:
Billing cycle factor multiplied by the estimated bill based on the customer’s average monthly load with WNH during the most recent 12 consecutive months within the past two years. Where relevant usage information is not available for the customer for 12 consecutive months within the past two years, WNH shall base the customer’s average monthly load on a reasonable estimate.
The billing cycle factor is 2.5 for a customer who is billed monthly and 1.75 for a customer who is billed bi-monthly.
Where a customer has a payment history which discloses more than one disconnection notice in a relevant 12 month period, WNH will use the customer’s highest actual or estimated monthly load for the most recent 12 consecutive months within the past 2 years for the purposes of making the calculation of the maximum amount of security deposit.
Security Deposit Waiver Requirements
Non-residential customers in a < 50kW demand rate class
A security deposit will be waived subject to the following:
1. Good payment history of five (5) years with WNH.
2. Proof of a good payment history of five (5) years with another electricity distributor or gas distributor in Canada.
3. Credit check satisfactory to WNH. The cost of such credit check shall be at the expense of the customer. Download the Credit Check Authorization Form
Non-residential customers in any other rate class
A security deposit will be waived subject to the following:
1. Good payment history of seven (7) years with WNH.
2. Proof of a good payment history of seven (7) years with another electricity distributor or gas distributor in Canada.
3. Credit check satisfactory to WNH. The cost of such credit check shall be at the expense of the customer. A customer in a >5,000 kW demand rate class cannot use a credit check.
For non-residential customers over 5,000 kW who has maintained a good payment history for seven (7) years, WNH will refund 50% of the deposit. To obtain a higher refund of the deposit, the customer must obtain a credit rating agency report from Dominion Bond Rating Service (DBRS), Standard & Poors (S&P) or Moody’s. A credit rating replaces good payment history and the refund amount will depend on the individual rating in accordance with Table 1.
Table 1
| Credit Rating (Using Standard and Poor’s Rating Terminology) |
Allowable Reduction in Security Deposit |
| AAA- and above or equivalent | 100% |
| AA-, AA, AA+ or equivalent | 95% |
| A-, From A, A+ to below AA or equivalent | 85% |
| BBB-, From BBB, BBB+ to below A or equivalent | 75% |
| Below BBB- or equivalent | 0% |
Security deposits will be returned to the customer upon:
1. A customer switching to Retailer-Consolidated Billing. See “Retailer-Consolidated Billing” for the application of the security deposit.
2. Termination of Service. In returning the security deposit to the customer, Waterloo North Hydro Inc. shall apply the cash deposit amount plus any accrued interest to the final bill. Any excess shall be returned to the customer. The customer is still responsible to WNH for the payment of any outstanding balances on their account following the application of the security deposit to their final bill.
Interest On Cash deposits
Interest shall accrue monthly on security deposits made by way of cash or cheque commencing on receipt of the total deposit required by WNH. The interest rate shall be Prime Business Rate as published by the Bank of Canada website less 2 percent, updated quarterly. The interest accrued shall be paid out at least once every 12 months or on return or application of the security deposit or closure of the account, whichever comes first, and may be paid by crediting the account of the customer.
Waterloo North Hydro Inc.
300 Northfield Drive East
PO Box 640
Waterloo, Ontario, N2J 4A3
Phone: 519-886-5090
Employment Opportunities
Phone: 519-888-5543
General Inquires:
Customersupport@wnhydro.com
Phone: 519-885-6840
Fax: 519-746-0133
Engineering Inquiries:
eclerk@wnhydro.com
Phone: 519-888-5552
ECRA/ESA LICENCE 7004206
Standard Business Hours:
8:30am - 4:30pm (Monday - Friday)
Emergency Hours:
24 hours a day, seven days a week
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