STARKVILLE — A new, more expensive utility deposit is on the way in Starkville.
The city’s Board of Aldermen Tuesday approved a new Starkville Electric Department deposit policy which increases the amount new residents must pay when setting up new accounts. The new rates are based on a customer’s utility credit history, which the Electric Department will check when patrons sign up for service.
A customer who has shown no problem paying utility bills in the past will have to pay a $185 deposit, of which $150 will go toward electric and $35 will go toward water and sewer service.
A customer who has had some problem paying utilities in the past, but isn’t considered a risk to leave town without paying his or her final bill, will be charged a $250 deposit, of which $200 will go toward electric and $50 will go toward water and sewer.
The highest rates will come for customers who have had significant problems paying utility bills in the past and are considered a risk to leave without paying their final bills. The high-risk customers will be charged a $315 deposit.
The Electric Department’s current rates are $60 for a new homeowner and $165 for a new renter. The new policy doesn’t differentiate between renters and homeowners. All must pay the same rates based on their utility credit history.
Aldermen approved the new policy 5-1. Ward 6 Alderman and Vice Mayor Roy Perkins voted against the new policy and called the increased rate “hefty.” Ward 5 Alderman Matt Cox was not in attendance.
The Electric Department wanted the new deposit policy because of the high number of Mississippi State University students and other residents who skip town without paying their final bill or two, said SED General Manager Edd Hattaway.
Ward 3 Alderman P.C. “Mac” McLaurin admitted he was skeptical of the credit check process at first, but he eventually came around after discovering utility companies all over the country are employing a similar practice. He also wants to help the Electric Department recoup some of its losses.
From Jan. 1, 2007, to April 30, 2009, the Electric Department accrued $203,201 in unpaid bills. Many of the bills belong to MSU students who have left town, though some are a result of foreclosures and deaths, Hattaway said.
“While nobody wants to pay higher deposits, the city of Starkville is losing money by people skipping out on their bills,” McLaurin said. “If the Electric Department loses money, rates go up.”
Tim Pratt is the Starkville Bureau Reporter for The Commercial Dispatch.
