Arizona Utility Deposit Bond

Many Arizona utility companies require their customers to get bonded before using their services. The bond needed is known as an Arizona Utility Deposit Bond or Arizona Utility Bond.

If you are an AZ utility customer who may need one of these surety bonds, here is what you need to know.

An Arizona Utility Bond ensures that a utility company gets reimbursed if a customer fails to pay their bill. When a customer defaults on payment, the utility company can make a claim against the customer’s bond to recoup its losses.

Every AZ Utility Deposit Bond is a contract between three parties:

1. Principal – the person or business that needs to get bonded to use utility services.
2. Obligee – the utility company requiring the principal to get the bond.
3. Surety – the company that issues and financially backs the bond (ex. Lance Surety Bonds). In the event that a valid claim is made against the bond, the surety company ensures it is paid in a timely manner. The principal must then pay them back in full.

This surety bond acts as a financial guarantee. It is in place to protect utility companies and their financial well-being. This includes electric companies, water companies, and gas companies.

You only need an Arizona utility deposit bond if you are a commercial business in the City of Safford or if a utility company asks for one. While the City of Safford requires all customers to hold this surety bond, other utility companies only require the bond if you are considered a“high risk” for non-payment.

Common reasons you might be deemed as a high-risk customer include:

• Having multiple missed or late payments
• Being previously disconnected from service due to payment issues
• Having a poor credit score.
• Being a new customer with high-volume utility needs (ex. factories or hotels)

An Arizona Utility Deposit Bond costs as little as $100 but heavily varies. Utility companies can request a bond in an amount of their choosing, generally anywhere from $500 - $200,000. However, note that you don’t pay that full bond amount—your bond’s cost is only a small fraction (typically 1% - 3% if you have good credit).

Bond Amount: Also known as the penal sum. This amount is set by the utility company asking for the bond. It is typically one to two and a half times the amount of your monthly utility bill.

Credit Score: Your credit score is the main factor determining the percentage of your bond you must pay. This is known as your bond rate or bond premium. See the chart below.

Get a Free Bond Quote for an Arizona Utility Deposit Bond.

Alternative Options to Utility Deposit Bond

Per Arizona Revised Statutes, Title 7, you may also put down a deposit with the utility company in lieu of a bond. However, this deposit must be in the full amount of the bond—if you need a $10,000 bond, your deposit would need to be $10,000. Contrastingly, if you go with a $10,000 Utility Deposit Bond, it will only cost $100 - $1,000.

An Arizona Utility Deposit Bond costs as little as $100 but heavily varies. Utility companies can request a bond in an amount of their choosing, generally anywhere from $500 - $200,000. However, note that you don’t pay that full bond amount—your bond’s cost is only a small fraction (typically 1% - 3% if you have good credit).

Bond Amount: Also known as the penal sum. This amount is set by the utility company asking for the bond. It is typically one to two and a half times the amount of your monthly utility bill.

Credit Score: Your credit score is the main factor determining the percentage of your bond you must pay. This is known as your bond rate or bond premium. See the chart below.

Get a Free Bond Quote for an Arizona Utility Deposit Bond.

Alternative Options to Utility Deposit Bond

Per Arizona Revised Statutes, Title 7, you may also put down a deposit with the utility company in lieu of a bond. However, this deposit must be in the full amount of the bond—if you need a $10,000 bond, your deposit would need to be $10,000. Contrastingly, if you go with a $10,000 Utility Deposit Bond, it will only cost $100 - $1,000.

1. Apply for a Free Bond Quote

Get an instant bond quote with our online application. This form only takes a few minutes to complete, and it’s available 24/7.

Information needed includes:

• Bond Name (Utility Deposit Bond)
• Bond Amount (Varies. Your utility company sets this amount)
• Your Contact Information

Have questions or prefer to apply over the phone? Call one of our bond experts at 877-514-5146.

2. Check Your Email

A bond quote will be sent directly to your email. Please check your Junk folder. This email usually only takes a few minutes to arrive, but underwriting for larger bond amounts may take longer.

3. Purchase Your Bond

Follow the email instructions to sign the bond agreement and pay your invoice online. We can forward a copy of your bond to your utility company on your behalf. The original bond can also be sent by mail upon request.

How long does it take to get a utility deposit bond?

You can get a Utility Deposit Bond with Lance Surety Bonds in under 24 hours. Once you know the bond amount you need, simply fill out our online application for an instant bond quote or call one of our surety experts at 877-514-5146.

Is the bond premium a one-time payment?

Yes, the bond premium is a one-time payment that covers your bond until it expires. However, we can also break your bond premium into monthly payments.

If you need to renew your bond when it expires, you will have to pay the bond premium again. However, utility companies often drop the bond requirement after a year of on-time payments, making renewal unnecessary.

What if I have bad credit?

Getting an Arizona Utility Deposit Bond is possible with bad credit. While your bond premium may be slightly higher, we can still get you bonded quickly and with ease.

After being quoted a premium of 15% by another surety company, Darla contacted us regarding getting bonded with bad credit. We were able to offer her a rate that was 6% cheaper than her previous quote. Plus, we got her fully bonded in only a couple of hours.

Which utility companies in Arizona require a utility deposit bond?

Many utility companies in Arizona may ask for a Utility Deposit Bond, including the Arizona Public Service Company, Southwest Gas Utility Company, and Tucson Electric Power Company.

Utility company bonds we cover under our AZ Utility Deposit Bond include, but aren’t limited to:  

• Arizona Public Service Utility Bond
• Mohave Electric Cooperative Utility Bond
• Navopache Electric Cooperative Utility Deposit Bond
• Salt River Project Utility Bond
• Southwest Gas Utility Bond
• Sulpher Springs Valley Electric Utility Bond
• Tucson Electric Power Company Utility Bond
• UNS Energy Corporation Utility Service Payment Bond

2024 Arizona Revised Statutes :: Title 7 - Bonds. (n.d.). In Justia Law. Retrieved April 1, 2025, from
https://law.justia.com/codes/arizona/title-7

Utility Bond. (n.d.). In Lance Surety Bonds. Retrieved April 1, 2025, from
https://www.lancesuretybonds.com/license-bonds/utility-bonds