Step 1: Confirm the requirement with the utility
Begin with the utility's commercial credit department. Ask whether a surety bond is permitted for the specific account and customer class. Utilities control the acceptable security method, amount, bond wording, term, issuer qualifications, and delivery process. A general statement on a website does not replace account-specific instructions.
Request a written deposit notice and the current utility-authored bond form. Confirm the customer's exact legal name, utility legal name, account and service location, amount, effective date, and deadline. Ask whether the utility requires an original, electronic submission, notarization, a power of attorney, or particular cancellation notice. If the utility does not accept a bond, issuance of one will not satisfy the requirement.
Step 2: Organize business information
The application should identify the principal exactly as it must appear on the bond. Common records include:
- legal name, entity type, formation state, address, and tax identification details;
- ownership and affiliated entities;
- the utility's notice, required form, account number, and service addresses;
- requested amount and expected service start;
- business financial statements and recent interim results;
- bank and credit information; and
- explanations of material losses, late utility payments, or unusual account changes.
Requirements vary by surety and transaction. Provide authentic, current information and explain inconsistencies. See the utility bond requirements checklist for a reusable preparation list.
Step 3: Submit for underwriting
The surety assesses whether it is willing to guarantee the obligation. Review may include liquidity, leverage, profitability, payment experience, ownership, utility usage, and the bond's cancellation and claim provisions. The surety may ask for updated records, personal or corporate indemnity, collateral, or clarification from the utility.
An application is a request, not a commitment. Underwriting may result in approval, changed terms, further conditions, or a decline. No applicant should represent to the utility that a bond is secured before it has been issued and accepted. Read utility bond underwriting to understand the distinction between financial review and the utility's eligibility decision.
Step 4: Review the proposed bond
Compare the prepared bond line by line with the utility's instructions. Verify:
- principal and obligee names;
- bond number and penal sum;
- service account or location references;
- effective date and term;
- cancellation and notice language;
- authorized signatures, seals, and power-of-attorney requirements; and
- delivery address or portal.
Do not revise prescribed language independently. If the surety cannot use a clause, the utility and surety must resolve that issue before delivery. More detail is available in the utility bond forms guide.
Step 5: Execute and deliver
Authorized parties sign as required. Some forms require the principal as well as the surety to execute the instrument. Follow the utility's delivery method and retain a complete copy. If an original is mailed, use appropriate tracking, but remember that delivery is not acceptance.
Ask the utility for written confirmation that it received and accepted the bond and that the account's security condition is satisfied. Correct any rejected item through the surety rather than altering an executed instrument.
Step 6: Maintain the account and security
Continue paying all utility invoices when due. The bond does not pay routine bills and is not a credit limit. Track renewal, continuation, cancellation notices, account-name changes, and requests to increase security. If usage grows, the utility may recalculate its exposure and require an amendment or replacement under its rules.
When the utility no longer requires security or service closes, ask what release procedure applies. Obtain written release when available; do not assume an account closure automatically terminates every bond obligation. A valid claim paid by the surety generally remains reimbursable by the principal.
The bond directory, state directory, and resource center can support research. They do not replace the utility's instructions or professional advice. Approval, bond issuance, and utility acceptance are never guaranteed, and this guide is not legal, financial, or accounting advice.