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About Security Deposits

Kitchener-Wilmot Hydro Inc. (KWHI) holds security deposits to minimize credit risk with new customers.  KWHI pays for energy long before invoices are sent to consumers for their use of that energy and so there is a large lag during which time the utility is exposed to non-payment risk.

Most customers who open a new account with Kitchener-Wilmot Hydro Inc.  are required to pay a security deposit.

A deposit requirement may be waived if a consumer provides a satisfactory credit check at the consumer's expense, or provides a letter of reference from a gas or electricity distributor in Canada confirming a "Good Payment History" for the following time period:

Rate Class Time Period
General Service < 50kW demand 3 years
General Service > 50kW demand 7 years
Large use customers >5,000 kW demand 7 years

For all rate classes, some of the time period making up the "Good Payment History" must be within the previous 24 months.

For existing customers where a security deposit has not been collected, or a customer who was previously granted a security deposit waiver, a security deposit will be required if the customer has not maintained a "Good Payment History" for the required time period relevant to their rate class.

Security deposits may be in the form of cash, cheque, a guaranteed letter of credit from the customer's bank, trust company, or credit union, or a power bond from their insurance company. All guaranteed letters of credit must be "irrevocable" and "automatically renewing".

A security deposit may be paid in instalments. When requested, customer shall be permitted to pay deposits in equal instalments over a six-month period, except in the case of an upgrade to an existing deposit, which must be paid in full by the due date.

Security Deposit Amounts

The amount of the deposit will be based on 2.5 times the amount  of the consumer's estimated bill based on their average monthly load with the distributor.  Where a customer has a payment history which discloses more than one disconnect notice in a relevant 12 month period, the deposit will be based on 2.5 times of the consumer's estimated bill based on their highest monthly load with the distributor.

For full details regarding security deposits, please refer to the Ontario Energy Board's Distribution System Code.