Santee Cooper just implemented new credit requirements for commercial water accounts that are absolutely insane. They're now requiring deposits equal to 3 months of estimated usage for any new commercial account, plus an additional 'risk assessment fee' of $500. For existing accounts, they're demanding new deposits if your account has more than 2 late payments in the past 24 months, even if everything was eventually paid in full. One of my clients just got hit with a $15,000 deposit demand on their industrial water account. This seems like a cash grab disguised as risk management. Has anyone else seen utilities dramatically increasing deposit requirements recently?
Santee Cooper Water Deposits and Credit Requirements Gone Crazy
George, that's outrageous but unfortunately not unique. Georgia Power pulled similar moves in 2023, dramatically increasing deposit requirements and adding new fees. The key is checking if these changes went through proper regulatory approval. In South Carolina, doesn't Santee Cooper have to get PSC approval for major tariff changes like this? If they implemented these requirements without proper notice and approval, you can challenge the entire policy. Also worth checking if they're applying different standards to different customer classes - that could be discriminatory.
We're seeing similar aggressive deposit policies from Pacific Power here in Oregon. They call it 'enhanced credit management' but it's really just utilities trying to improve cash flow by holding more customer money. The $500 risk assessment fee is particularly sketchy - what exactly are they assessing that justifies that cost? I'd demand detailed documentation of their risk assessment methodology and challenge any fees that seem arbitrary. Most utilities back down when you start asking for detailed justification of their new fees.
This is becoming a nationwide trend. Huntsville Utilities tried something similar in late 2024 but backed down after pushback from the business community. The trick is proving the deposit requirements are unreasonable compared to actual risk. Get data on your client's payment history - if they've been a customer for years with minimal late payments, a $15K deposit is clearly excessive. Also check if Santee Cooper pays interest on deposits and at what rate. Some utilities are essentially getting free loans from customers through these inflated deposit requirements.
George, you need to look at this as a potential class action situation. If Santee Cooper is hitting multiple businesses with similar deposit demands, there's strength in numbers. Here in Missouri, we successfully challenged Columbia Water & Light's deposit increases by showing they exceeded reasonable risk-based requirements. The key evidence was comparing their new deposits to actual bad debt losses - they were demanding deposits worth 10x their annual bad debt rate. That kind of mathematical disconnect shows the policy isn't really about risk management.
John's class action idea is smart. We've seen utilities implement these cash-grab policies hoping most customers will just pay rather than fight. The $500 'risk assessment fee' is particularly vulnerable because it's hard to justify that specific amount for what's probably just running a credit report. Document everything - demand itemized explanations of all fees and deposit calculations. If enough businesses push back simultaneously, utilities usually retreat to more reasonable policies.
Had a similar battle with Louisville Water in 2023. They wanted $8K deposit from a client with 15 years of perfect payment history just because they missed two payments during COVID lockdowns. We challenged it as unreasonable and discriminatory - turns out they were only applying the strict standards to certain customer classes while giving breaks to others. That selective enforcement angle can be very effective. Check if Santee Cooper is treating all customers equally or if there's bias in how they're applying these new requirements.
The timing of these deposit increases is suspicious - utilities are dealing with rising infrastructure costs and looking for creative ways to improve cash flow. That $500 risk assessment fee sounds like pure profit since actual credit checks cost maybe $25. I'd also investigate if Santee Cooper changed their deposit calculation methodology recently. Often utilities will switch from using actual historical usage to inflated projected usage to justify higher deposits. Compare their current deposit calculations to what they used in previous years.
Thanks for all the insights. I've now identified 12 other businesses hit with similar deposit demands, ranging from $3K to $22K. The pattern seems to target accounts with any payment history issues, no matter how minor or how long ago. Filed complaints with SC PSC this week and requested full documentation of their risk assessment methodology. Also discovered they're only paying 1% interest on deposits while commercial lending rates are over 7% - that's basically free money for Santee Cooper. Definitely looking into class action possibilities.
George, that 1% interest rate is highway robbery in today's rate environment. Tennessee requires utilities to pay at least 75% of the current Treasury bill rate on customer deposits. Check what South Carolina law requires - there may be statutory minimum interest rates that Santee Cooper is violating. That alone could force them to recalculate all deposits and pay retroactive interest adjustments. Sometimes the interest rate violations are easier to prove than challenging the deposit amounts themselves.
Following this case with interest from Texas. Our clients are starting to see similar deposit increases from municipal utilities who are copying policies from larger investor-owned utilities. The key is establishing that these aren't legitimate risk-based deposits but rather cash flow enhancement schemes. Document the timing of when these policies were implemented - if it coincides with utility financial pressures or rate case proceedings, that supports the cash grab theory.
Marcus raises a great point about timing. Santee Cooper announced these deposit changes just two months after their last rate increase was denied by the PSC. Seems like they're trying to boost cash flow through deposits since they can't raise rates. That kind of end-run around regulatory oversight should definitely be challenged. Also found out they outsourced their credit assessments to a third-party company that charges $500 per evaluation - explains the arbitrary fee amount. It's not risk assessment, it's cost recovery for their vendor contract.
George, you've uncovered a textbook example of regulatory arbitrage - utilities trying to collect money through deposits and fees when they can't get rate increases approved. That outsourced credit assessment revelation is huge because it shows the $500 fee isn't based on actual risk evaluation costs but rather covering their vendor expenses. This strengthens your case that these aren't legitimate credit requirements but unauthorized rate increases disguised as risk management. Keep documenting everything and don't let them bully your clients into paying without a fight. This kind of abuse only stops when utilities face real consequences for overreaching.
One more thought - check if Santee Cooper is applying these deposit requirements to their own facilities or affiliated entities. Utilities sometimes exempt themselves or related parties from the same credit requirements they impose on customers. That kind of self-dealing is a red flag for regulators and strengthens discrimination arguments. Also worth investigating if board members or executives have connections to the third-party credit assessment company they're using.