Why aren’t deposits included in the Utility Fee Survey?

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The 2017 Utility Fee Survey is a tool for researching what fees different utilities charge and how much they charge for each fee. I was asked why the survey doesn’t include a question about security deposits.

Beyond the obvious

Obviously, a security deposit isn’t a fee because fees, by definition, are non-refundable and security deposits are refundable.

Rate increases are never popular, and the best alternative to increasing rates (which impacts all customers) is to charge equitable fees. Fees, such as an administrative fee for activating new customers or a disconnection fee for non-payment, are assessed only to those customers using the service covered by the fee.

Comparing what fees your utility charges, and how much you charge for each, to what other utilities charge is a useful exercise. Such comparisons provide a benchmark for determining if your utility is charging all available fees and if the amount of those fees is fair.

Security deposits, on the other hand, are a function of each utility’s rates, business practices, and customer usage patterns. I’ve written previously about why comparing your security deposit to other utilities is pointless. A better exercise would be to review your own business practices to find ways to reduce your days of exposure.

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