Security Deposits for Electricity or Natural Gas in Alberta

Hilary

By Hilary

Updated on
min reading

The 2005 Alberta Energy Marketing and Residential Heat Sub-Metering Regulation states that

A marketer may collect a security deposit from a consumer at the time the consumer enters into a marketing contract
(a) if the consumer has no credit history,
(b) if, in the opinion of the marketer, the consumer has a poor credit rating, or
(c) if the consumer’s previous supply of electricity or gas was cancelled for non-payment.

The maximum amount of a security deposit that an energy marketer is allowed to ask from a residential consumer for an electricity contract is 30% of the estimated yearly electricity bill, as estimated by the marketer. The maximum amount that can be asked as a security deposit for natural gas is the same (30%). Most energy marketers estimate the security deposit based on the historical consumption of the property and on predicted weather for the following year.

An energy marketer cannot accept a security deposit in cash.

Any security deposit charged by your energy supplier is not optional. If you do not pay the full amount by the requested date, any subsequent payments that you make towards them will go towards paying the security deposit before paying your energy supply costs. If you have paid a security deposit but cancel your contract within 15 days of signing it, the energy marketer is obliged to return your security deposit to you in full.

Your energy supplier may use your security deposit to make any payments for your energy supply that you are owing. You should not, however, consider the security deposit as payment for your energy supply. They must refund the security deposit back to you after 12 months of paying your bill in full and on time (within 15 days of the last payment for that year), with interest. Interest is set at the ROYAL Bank GIC rate that is in effect.

Can I Avoid Paying a Security Deposit?

You may not have to pay a security deposit, or at least have it reduced, under the following conditions:

  • Your credit history is deemed satisfactory by your energy supplier
    The energy supplier has the right to evaluate and decide if your credit rating is sufficient to waive the security deposit requirement.
  • You can provide a letter of recommendation from a previous energy utility
    If you can provide a letter from a previous utility or energy supplier stating your good payment history (usually at least 12 months of payments in full and on time), your current energy supplier may decide to reduce or waive the security deposit requirements. This letter should be dated from within the last 3 months. Some energy suppliers may accept a letter from a cellphone or cable company if this is the first time that you have had your name on energy bills.
  • You sign up for a pre-authorized payment plan