(1) Deposit criteria for residential customers. A gas utility may collect a deposit from its own customers for residential service only if:

(a) At any time during the prior twelve months, the utility has sent the customer three or more delinquency notices;

(b) The utility has disconnected the customer's residential service for nonpayment; or

(c) There is a prior customer living at the residence who owes a past-due bill to the utility for service at that address.

(2) Deposit criteria for residential applicants. A utility may collect a deposit from an applicant for residential service only if:

(a) The applicant has met any of the conditions described in subsection (1) of this section as a prior customer of the utility or as a customer of another natural gas utility;

(b) The applicant is not able to demonstrate continuous employment during the prior twelve consecutive months and neither is currently employed nor has a regular source of income;

(c) The applicant does not own or is not purchasing the premises to be served;

(d) There is a prior customer living at the residence who owes a past-due bill to the utility at that address; or

(e) The applicant has an unpaid, overdue balance owing to any electric or gas utility for residential service.

(3) Deposit amount. Deposits required for a customer or location must not exceed:

(a) Two-twelfths of the estimated annual billings for utilities billing monthly; or

(b) Three-twelfths of estimated annual billings for utilities billing bimonthly.

(4) Deposit payment arrangements. The utility must allow an applicant or customer the option of paying fifty percent of the deposit prior to service, and paying the remaining balance in equal amounts over the next two months, on the dates mutually agreed upon between the applicant or customer and the utility. The utility and applicant or customer may make other mutually acceptable deposit payment arrangements.

(5) Alternative to deposit. The utility must allow any applicant or customer who indicates an inability to pay a deposit:

(a) To prepay any service initiation fees and reasonably estimated regular service charges or budget billings at periods corresponding to the utility's regular billing periods for the length of time during which a deposit would ordinarily be required. The utility must then bill the applicant or customer in a normal fashion; or

(b) To furnish a satisfactory guarantor. A guarantor must be considered satisfactory if the guarantor has at least established credit with the utility as outlined in this section. A utility may, at its discretion, accept a guarantor that does not meet the requirements of this section. If the customer has been disconnected, the guarantor is responsible for the amount stated on the disconnection notice, not to exceed the amount of the deposit as defined in subsection (3) of this section unless the guarantor has agreed to guarantee an additional amount as specified in subsection (7) of this section; or

(c) To notify the utility of the inability to pay a deposit as provided in WAC 480-90-143, Winter low-income payment program; or

(d) The opportunity to provide a reference from a similar utility that can quickly and easily be checked if the conditions in subsection (1) of this section cannot be met.

(6) Transfer of deposit. When a customer moves to a new address within the utility's service territory, the deposit plus accrued interest, less any outstanding balance owing from the old address, must be transferred to the new address or refunded.

(7) Additional deposit. If a deposit or additional deposit amount is required after the service is established, the reasons must be specified to the customer in writing. Any request for a deposit or additional deposit amount must comply with the standards outlined in subsection (1) of this section. If the original deposit was secured by a guarantor and the guarantor does not agree to be responsible for the additional deposit amount, the customer will be held responsible for paying the additional deposit.

(8) Deposit payment date. Any deposit or additional deposit amount required after service is established is due and payable not earlier than 5:00 p.m. of the sixth business day after notice if the deposit requirement notice is mailed from within the states of Washington, Oregon, or Idaho, or the ninth business day if mailed from outside the states of Washington, Oregon, and Idaho. If the utility delivers the notice to the customer in person, the deposit or additional deposit amount is due and payable not earlier than 5:00 p.m. of the sixth business day from the date of delivery.

(9) Interest on deposits. Utilities that collect customer deposits must pay interest on those deposits calculated:

(a) For each calendar year, at the rate for the one-year Treasury Constant Maturity calculated by the U.S. Treasury, as published in the Federal Reserve's Statistical Release H.15 on January 15 of that year. If January 15 falls on a nonbusiness day, the utility will use the rate posted on the next following business day; and

(b) From the date of deposit to the date of refund or when applied directly to the customer's account.

(10) When refund of deposits is required. A utility must apply deposits plus accrued interest to the customer's account, or refund deposits plus accrued interest when there has been satisfactory payment, as defined in (a) of this subsection, or when service is terminated.

(a) "Satisfactory payment" means a customer has paid for service for twelve consecutive months in a prompt and satisfactory manner as evidenced by the following:

(i) The utility has not started a disconnection process against the customer; and

(ii) The utility has sent no more than two delinquency notices to the customer.

(b) Termination of service. When service is terminated, the utility must return to the customer the deposit amount plus accrued interest, less any amounts due the utility by the customer.

(11) How deposits are refunded. A utility must refund any deposit plus accrued interest as indicated by the customer at the time of deposit, or as modified by the customer on a later date, using one of the following methods:

(a) A check issued and mailed to the customer no later than fifteen days following completion of twelve months of satisfactory payment, as described above; or

(b) A credit applied to the customer's account for service beginning in the thirteenth month.