Can a public utility require a non refundable deposit for a new account?

UPDATED: Sep 30, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Sep 30, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can a public utility require a non refundable deposit for a new account?

I want to change my electrical service from my name to my daughters. They are
requiring a 150.00 deposit that will only be refunded when the service with the
PUD is terminated. Why isn’t that considered extortion? Since my daughter will
own the property and may never move or terminate the service, the money could
potentially never be refunded.

Asked on August 5, 2016 under Business Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

It's not extortion because 1) your daughter is voluntarily choosing to open the account--no one is using illegal means (e.g. threats of violence or blackmail) to force her to do this, and what is done voluntarily is not extorted; and 2) she will get the money back if and when the service termintes--i.e. it is essentially being "banked" for her and she is not losing it (so long as she complies with the terms of service, pays her bills, etc., to that they do not need to draw on the deposit). Yes, it may be many, many years before she terminates the account, and it could even be the money will eventually go back to her estate if she passes away while living there, but on the other hand, she could choose to move and close the account in a year. The fact that the date of return is uncertain does not make holding the deposit illegal.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption