Section 170IAC6-1-15. Creditworthiness of customer; deposit; refund

   (a) Each utility shall determine the creditworthiness of residential applicants or customers in an equitable and nondiscriminatory method:

(1) without regard to the economic character of the area wherein the applicant or customer resides; and

(2) solely upon the credit risk of the individual without regard to the collective credit reputation of the area in which he or she lives.

  (b) Each new applicant for residential water service shall be deemed creditworthy and shall not be required to make a cash deposit as a condition of receiving service if the applicant satisfies the following criteria:

(1) If the applicant has been a customer of any utility within the last two (2) years, the applicant:

(A) owes no outstanding bills for service rendered within the past four (4) years by any such utility;

(B) during the last twelve (12) consecutive months that the service was provided, did not have more than two (2) bills that were delinquent to any utility or, if service was rendered for a period for less than twelve (12) months, did not have more than one (1) delinquent bill in such period; and

(C) within the last two (2) years did not have a service disconnected by a utility for nonpayment of a bill for services rendered by that utility.

(2) If the applicant has not been a customer of a utility during the previous two (2) years, any two (2) of the following criteria are met:

(A) The applicant either:

(i) has been employed by his or her present employer for two (2) years;

(ii) has been employed by his or her present employer for less than two (2) years, but has been employed by only one (1) other employer during the past two (2) years; or

(iii) has been employed by the present employer for less than two (2) years and has no previous employment due to recently:

(AA) graduating from a school, university, or vocational program; or

(BB) being discharged from military service.

(B) The applicant either:

(i) owns or is buying his or her home; or

(ii) is renting a home or an apartment and has occupied the premises for more than two (2) years.

(C) The applicant has credit cards, charge accounts, or has been extended credit by a bank or commercial concern unless a credit check shows that the applicant has been in default on any such account more than twice within the last twelve (12) months.

  (c) If the applicant fails to establish that he or she is creditworthy, under subsection (b), the applicant may be required to make a reasonable cash deposit. Such deposit shall not exceed one-sixth (¹/6) of the estimated annual cost of service to be rendered to the applicant. If a deposit is greater than seventy dollars ($70), the utility shall advise the applicant or customer simultaneously with making a demand for a deposit that the applicant or customer may pay such deposit in equal installment payments over a period of no less than eight (8) weeks; service shall be connected upon receipt by the utility of the first such payment.

  (d) If the utility requires a cash deposit as a condition of providing service, then it must immediately notify the applicant in writing stating the precise facts upon which the utility based its decision and provide the applicant with an opportunity to rebut such facts and show other facts demonstrating his or her creditworthiness.

  (e) A utility may require a present customer to make a reasonable cash deposit when:

(1) the customer has been mailed disconnect notices for two (2) consecutive months;

(2) the customer has been mailed disconnect notices for any three (3) months within the preceding twelve (12) month period; or

(3) the service to the customer has been disconnected within the past four (4) years pursuant to section 16 of this rule.

The amount of such deposit may not exceed an amount equal to one-sixth (¹/6) of the expected annual billings for the customer at the address at which service is rendered. In the event the required deposit is in excess of seventy dollars ($70), the utility shall advise the customer that he or she may pay such deposit in equal installment payments over a period of up to eight (8) weeks, except where such deposit is required as a result of a disconnection for nonpayment, in which case full payment of the deposit may be required prior to reconnection.

  (f) Requirements for interest upon deposits shall be as follows:

(1) Deposits held more than twelve (12) months shall earn interest from the date of deposit at a rate of six percent (6%) per annum or at such other rate of interest as the commission may prescribe following a public hearing.

(2) The deposit shall not earn interest after the date it is mailed or personally delivered to the customer, or otherwise lawfully disposed.

  (g) Requirements for refunds shall be as follows:

(1) Any deposit or accrued interest shall be promptly refunded to the customer without the customer's request when the customer:

(A) submits satisfactory payment for a period of either:

(i) nine (9) successive months; or

(ii) ten (10) out of any twelve (12) consecutive months without late payment in two (2) consecutive months; or

(B) demonstrates his or her creditworthiness as provided by subsection (b).

(2) Refunds of deposits or accrued interest issued under this section must be accompanied by a statement of accounting for each transaction affecting the deposit and interest.

(3) Following customer-requested termination of service, the utility shall:

(A) apply the deposit, plus accrued interest, to the final bill; or

(B) upon specific request from the customer, refund the deposit, plus accrued interest, within fifteen (15) days after payment of the final bill.

(4) Each utility shall maintain a record of each applicant or customer making a deposit that shows the following:

(A) The name of the customer.

(B) The current address of the customer so long as he or she maintains an active account with the utility in his or her name.

(C) The amount of the deposit.

(D) The date the deposit was made.

(E) A record of each transaction affecting such deposit.

(5) Each customer shall be provided a written receipt from the utility at the time his or her deposit is paid in full or when he or she makes a cash partial payment. The utility shall provide a reasonable method by which a customer who is unable to locate his or her receipt may establish that he or she is entitled to a refund of the deposit and payment of interest thereon.

(6) Any deposit made by the applicant, customer, or any other person to the utility (less any lawful deductions), or any sum the utility is ordered to refund for utility service, that has remained unclaimed for one (1) year after the utility has made diligent efforts to locate the person who made such deposit or the heirs of such person, shall be presumed abandoned and treated in accordance with IC 32-9-1.5-20(c)(10) [IC 32-9 was repealed by P.L.2-2002, SECTION 128, effective July 1, 2002.].

(7) A deposit may be used by the utility to cover any unpaid balance following disconnection of service under section 16 of this rule; provided, however, that any surplus be returned to the customer as provided in subsection (f) and this subsection.

(Indiana Utility Regulatory Commission; No. 34805: Standards of Service For Water Utilities Rule 15; filed Nov 28, 1977, 3:00 p.m.: Rules and Regs. 1978, p. 684; filed Oct 28, 1998, 3:22 p.m.: 22 IR 732; errata filed Nov 22, 1999, 3:31 p.m.: 23 IR 812; readopted filed Jul 11, 2001, 4:30 p.m.: 24 IR 4233; readopted filed Apr 24, 2007, 8:21 a.m.: 20070509-IR-170070147RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA)