Md. Code Regs. 20.30.01.02

Current through Register Vol. 51, No. 22, November 1, 2024

Section 20.30.01.02 - Establishment of Credit

A. A utility may require each applicant for nonresidential service to establish credit in compliance with the methods and procedures listed in §B of this regulation.

B. Methods of Establishing Credit.

(1) In order to establish credit, a utility may require an applicant for nonresidential service to demonstrate good paying habits by showing that the applicant:

(a) Was a customer of a Maryland utility for at least 12 months within the preceding 2 years;

(b) Does not currently owe any outstanding bills for utility service to a utility doing business in Maryland;

(c) Did not have service discontinued for nonpayment of a utility bill during the last 12 months that service was provided; and

(d) Did not fail, on more than two occasions during the last 12 months that service was provided, to pay a utility bill when it became due.

(2) In addition to demonstrating good paying habits under §B(1) of this regulation, a utility may require an applicant for nonresidential service to satisfy any one of the following in order to establish credit:

(a) Showing that the applicant has been actively engaging in its current business as a proprietorship, partnership, or corporation for a period of at least 4 years;

(b) Demonstrating credit worthiness by showing that the applicant has made payment on credit accounts when due;

(c) Furnishing a guaranty satisfactory to the utility, furnishing an irrevocable commercial letter of credit, or securing a bond drawn against an insurance company acceptable to the utility to secure payments of bills for the service requested in an amount not to exceed the amount of cash deposit prescribed in Regulation .04 of this chapter; or

(d) Otherwise establishing the applicant's credit to the satisfaction of the utility in conformance with additional reasonable regulations which it may adopt.

(3) A guaranty under §B(2)(c) of this regulation shall be in writing and shall continue in effect for 4 years from the date issued or until the customer's credit is otherwise established.

(4) Determination of credit worthiness under §B(2)(b) of this regulation shall be based upon information supplied through normal business credit reporting agencies, acceptable current financial statements, or other established accounts maintained in a satisfactory manner.

(5) If an applicant for nonresidential service is unable to establish credit under the provisions of §B(1) and (2) of this regulation, a utility may require the applicant to establish credit by making a cash deposit to secure payment of a final bill for service under Regulation .04 of this chapter.

(6) If a utility requests from an applicant credit or financial information under §B(4) of this regulation, and the information is not provided by the applicant within a reasonable time, the utility may require a deposit from an applicant under Regulation .04 of this chapter as a condition of providing service.

(7) The establishment of credit under this regulation does not relieve the applicant or customer from compliance with the reasonable regulations of the utility as to prompt payment of bills, and does not relieve the customer from having service terminated for nonpayment of bills due from service furnished.

(8) A utility shall advise all applicants for service that a customer may be required to reestablish credit under this regulation, if the conditions of service or the basis on which credit was originally established materially change.

Md. Code Regs. 20.30.01.02

Regulations .02 repealed effective November 18, 1985 (12:23 Md. R. 2221)
Regulations .02, .03-1, and .05-1 adopted effective November 18, 1985 (12:23 Md. R. 2221)