Illinois Utility Deposit Bond

An Illinois utility deposit bond lets customers start utility service without a large upfront cash deposit. Instead, the bond guarantees payment to the utility if bills go unpaid. Costs usually range from 1–5% of the bond amount. The process is straightforward, even for applicants with challenged credit, and renewal ensures coverage continues without disruption.

An Illinois utility deposit bond is a type of surety bond that serves as a substitute for a cash deposit when opening or maintaining utility services. Instead of paying a large deposit directly to the provider, the customer files a bond guaranteeing that payments will be made on time.

This arrangement involves three parties: the principal (the customer), the obligee (the utility company, such as Ameren or Naperville), and the surety (the bond provider). If the customer defaults, the surety compensates the utility, and the customer must reimburse the surety. Requirements for these bonds are set under the Illinois Administrative Code — Part 280, which governs deposits and credit for public utility services.

Utility providers rely on this system to reduce risk while allowing customers to begin service without locking up significant funds.

The cost of an Illinois utility deposit bond is called the premium. It represents a small percentage of the total bond amount required by the utility.

• Premium rates typically fall between 1% and 5%.
• A customer required to post a $5,000 bond could pay as little as $50 per year (at 1%) or as much as $250 per year (at 5%).
• Applicants with strong credit are more likely to qualify at the lower end of this scale, while those with weaker credit may pay closer to the higher end.

For a deeper look at how pricing works, see this guide to surety bond costs. This makes the bond a far more affordable option than a large cash deposit, which could otherwise tie up thousands of dollars.

Applying for a utility deposit bond is simple and can be done entirely online. The process generally follows these steps:

1. Apply through an online application. Provide basic details about your utility account and bond requirement.
2. Undergo underwriting. A soft credit check helps the surety determine eligibility and pricing.
3. Receive a quote. Based on financial history, you’ll be offered a premium rate.
4. Purchase the bond. Once payment is made, the bond is issued.
5. File the bond. Submit the bond to your utility provider, such as Ameren or Nicor Gas.

This process ensures utilities can activate service quickly, even for customers who would otherwise be required to provide a large cash deposit.

Yes, even applicants with challenged credit histories can obtain a bond. Lance Surety offers flexible underwriting that makes these bonds accessible regardless of past financial issues.

While applicants with lower credit scores may pay closer to 5% of the bond amount, the bond itself still provides the same level of protection for the utility. Transparent pricing and straightforward approval processes ensure customers know what to expect.

This flexibility makes an Illinois utility deposit bond a reliable option for residents and businesses who need to maintain essential services without relying on cash deposits. For broader coverage, you can also explore other Illinois surety bonds.

What is the bond amount based on?

The bond amount is set by the utility and usually equals two to three months of projected service charges. For example, Nicor Gas determines deposits using state regulations and the Illinois Administrative Code. 

How long does the bond remain in effect?

Most bonds are written for one year and must be renewed annually. Customers are typically notified before expiration, and paying the renewal premium ensures uninterrupted coverage. Utilities may eventually release the bond requirement after a customer establishes a strong payment record. 

Who requires this bond in Illinois?

Providers such as Ameren, Nicor Gas, and local municipalities like Naperville require these bonds under certain conditions. Their authority is supported by the Illinois Administrative Code - Part 280, which governs utility deposits. 

What happens if I don’t provide the bond?

If a utility requires a deposit and you fail to provide either cash or a bond, service will not begin. In some cases, existing service could be disconnected. Customers facing difficulty in meeting these requirements can seek resources from the Illinois DCEO, which offers assistance programs for households with energy challenges.

Illinois Administrative Code. (2023). Part 280 — Public Utilities. Retrieved from
https://www.ilga.gov/agencies/JCAR/Sections?PartID=08300280&TitleDescription=TITLE+83%3A++PUBLIC+UTILITIES

Illinois Department of Commerce & Economic Opportunity. (2018). Energy Assistance Policy Advisory Council Meeting Minutes. Retrieved from
https://dceo.illinois.gov/content/dam/soi/en/web/dceo/communityservices/homeweatherization/eapac/april-19-2018-pac-meeting-minutes.pdf

Nicor Gas. (2024). Terms and conditions of billing and maintenance of credit. Retrieved from
https://www.nicorgas.com/content/dam/southern-co-gas/nicor-gas/docs/rates-and-riders/nicor-terms-and-conditions-billing-and-maintenance-of-credit.pdf

Lance Surety Bonds. (2024a). Illinois Utility Deposit Bond. Retrieved from
https://www.lancesuretybonds.com/bonds-by-state/illinois/utility-deposit-bond

Lance Surety Bonds. (2024b). What is a surety bond? Retrieved from
https://www.lancesuretybonds.com/learn/what-is-a-surety-bond

Lance Surety Bonds. (2024c). Surety bond cost. Retrieved from
https://www.lancesuretybonds.com/learn/surety-bond-cost

Lance Surety Bonds. (2024d). Surety bond quote. Retrieved from
https://www.lancesuretybonds.com/surety-bond-quote

Lance Surety Bonds. (2024e). Illinois surety bonds. Retrieved from
https://www.lancesuretybonds.com/bonds-by-state/illinois