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To ensure all customers are treated equally, the Ontario Energy Board provided guidelines to all electricity distributors on how to apply security deposits across Ontario. Security deposits are collected to guarantee payment of future charges. Please take a moment to read this summary.
1. Requirements for Security Deposits
Security deposits may be collected when a customer initially applies for service, their electricity consumption increases or when they have failed to maintain a good payment history.
The security deposit amount will be applied to the customer's account and will appear as a line item on the bill.
Bulk-metered residential condominiums are eligible for treatment as residential customers for the purpose of security deposits. In order to qualify, the property must comply with the Condominium Act, 1998, and also be a residential condominium corporation. Qualifying condominium corporations must complete and return a Self-declaration form (PDF - 425 KB).
2. Security Deposit Review
Your security deposit will now be reviewed annually to determine whether it should be:
- Fully refunded due to good payment history;
- Partially refunded due to a reduction in electricity use;
- Increased due to an increase in electricity use;
- Remain unchanged.
3. Calculation of Security Deposit Amount
For residential customers, the security deposit is calculated based on your average monthly consumption during any 12 month consecutive period over the last two years.
For non-residential customers, we will calculate security deposits as follows:
- If you're billed monthly, the security deposit is calculated as 2.5 times your average monthly bill during the most recent 12 months within the past two years. If you've received two or more disconnection notices, we'll calculate the amount of the security deposit based on 2.5 times your highest actual or estimated bill.
- If you're billed bi-monthly, the average bill is multiplied by 1.75.
- If you have less than 12 months of service history with Hydro One, we will base the security deposit on a reasonable estimate.
4. The Importance of a Good Payment History
We encourage customers to maintain a good payment history to avoid being charged a security deposit. You are considered to have a good payment history as long as you haven't had one of the following on record:
- More than one disconnection notice issued.
- More than one cheque or pre-authorized payment returned for non-sufficient funds (NSF).
- A collection or disconnection trip has occurred.
- A security deposit was applied to your past due balance (for residential customers only).
In order for us to waive or refund a security deposit, customers must show good payment history for the following periods of time:
- One year for residential customers and bulk-metered residential condominium corporations that have self-declared.
- Five years for non-residential customers with less than 50 kW demand; and
- Seven years for non-residential customers demand of 50 kW and above.
5. Criteria to waive or reduce a Security Deposit
Your security deposit amount may be waived or decreased if you provide the following:
Residential customers (includes bulk-metered residential condominium corporations that have self-declared):
- A reference letter that confirms good payment history from another electric or natural gas utility in Canada where you were previously a customer. This letter must indicate that you had a good payment history for at least 12 months, some of this time must have occurred within the last two years.
- You may also provide a credit check at your expense that shows you are a good credit risk from Equifax or TransUnion.
Non-residential customers with less than 50 kW demand:
- A reference letter that confirms good payment history from another electric or natural gas utility in Canada where you were previously a customer. This letter must indicate that you had a good payment history for at least five years, some of which must have been within the past two years.
- You may also provide a credit check at your expense that shows you are a good credit risk from Equifax, TransUnion or Dun and Bradstreet.
For non-residential customers with demand of 50 kW and above:
- A reference letter that confirms good payment history from another electric or natural gas utility in Canada where you were previously a customer. This letter must indicate that you had a good payment history for at least seven years, some of which must have been within the past two years.
- You may also provide, at your expense, an acceptable credit rating from Standard & Poor's, Moody's or Dominion Bond Rating Service, or an acceptable credit check from Equifax, TransUnion or Dun and Bradstreet.
- We may hold up to 50% of your deposit in perpetuity based on your payment history.
6. Paying by Installments
Residential customers may pay a security deposit in equal installments over a six-month period. Non-residential customers may pay a security deposit in equal installments over a four-month period. If you would like to pay by installment please contact us.
7. Acceptable Forms of Security
You may provide the security deposit by:
- Electronic banking or cheque; or
- Deposit alternatives such as an automatically renewing irrevocable letter of credit from a bank as defined in The Bank Act.
Exceptions/Special Circumstances
- When a security deposit has been applied or increased due to a poor payment history, neither a satisfactory utility reference or credit check will be accepted. Only a good payment history will allow for a refund of the security deposit.
- If you have not maintained a good payment history with Hydro One Networks we cannot accept another utility reference letter to waive or reduce your security deposit amount.
- Utility reference letters are only valid for a one-year period.
8. Interest
Interest is payable quarterly on security deposits and applied to the account. This will be paid to you starting on receipt of the total deposit. The interest rate used is the Bank of Canada's Prime Business Rate less 2%. Interest due will be paid quarterly, or on return of the security deposit or closure of the account, whichever comes first. Interest will be paid by credit to your account.
9. More Information
For more information on our Security Deposit Policy, please view 'Section 2.4.3. Deposits' from our Conditions of Service.
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