Why do customers have to provide security for payment?
The method of billing for electricity after it has been used is convenient for customers. The electric energy is supplied and used instantly on customer demand and it cannot be returned after it has been delivered.
Therefore, in accordance with good business practice to minimize the impact of bad debts on the cost of providing electricity supply, the Company may require security to be given by customers for payment of electricity bills. Section 15(4), First Schedule of Caption 278 of the Electric Light & Power Act provides for the collection of security payments.
Which customers are required to provide security for payment?
All customers, except Barbadian residents on the Domestic Service tariff, are normally required to provide security for payment. However, Barbadian residents on Domestic Service tariff may be asked to provide security if they are delinquent in paying their bills or have other credit related issues.
How much security is required?
Security is normally required to cover three months of electricity bills.
How can security be provided?
Security for payment may be provided in the form of a cash deposit, a Bankers’ Guarantee or a continuing bond issued by a commercial bank or other approved financial institution. Cash deposits gain interest at a rate approved by the Fair Trading Commission.
Are deposit statements mailed to customers?
Yes. Deposit statements are mailed to customers at the beginning of each year showing the deposit and accumulated interest at the end of the previous year. Also shown are any transactions such as deposit payments or transfers during that year.
Deposits earning more than $100.00 in interest during the year are subjected to 12½% withholding tax. Two (2) withholding tax statements are mailed, one for the customer and the other for Income Tax purposes.
When is a cash deposit refunded?
The cash deposit will be refunded with the accumulated interest when the account is terminated or arrangements are made to provide alternative security (such as a banker’s guarantee).
When is the interest on cash deposits paid to the customer?
Interest is added to the cash deposit daily at the interest rate set by the Company and approved by the Fair Trading Commission. At any time, a customer may request to have his or her deposit reviewed.
If the level of the deposit plus accumulated interest is greater than the security requirement, and provided that no increase in usage is anticipated in the near future, the portion of the deposit plus interest that is in excess of the amount of security required may be refunded to the customer.