No franchise may be granted to any water or sewer utility company until the applicant furnishes a bond, secured with sufficient surety as approved by the Commission, in an amount not less than twenty-five thousand dollars ($25,000). The bond shall be conditioned upon providing adequate and sufficient service within all the applicant's service areas, including those for which franchises have previously been granted, shall be payable to the Commission, and shall be in a form acceptable to the Commission.
The acceptable forms of bond surety are certificate of deposit (A-1), letter of credit (A‑2), or corporate surety bond (A-3). Please refer to Appendix A-4 below for the filing requirements for each form of bond. Contact Joann Snyder, Commission Bond Administrator, if you have any questions at 919-733-7683 or email@example.com.
When the amount of bond has been recommended by the Public Staff and accepted by the utility, the utility shall complete one of the Commission’s acceptable bonds and submit the original bond documents to Joann Snyder, Bond Administrator. (See Bond Appendices A-1, A-2, and A-3.) All original bond documents must be hand delivered or mailed to Joann Snyder. Do not file copies of bond documents through the Commission’s website portal. Additionally:
- If the bond selected is Appendix A-1, Certificate of Deposit, the Applicant shall deposit the appropriate amount of bond surety with the bank of its choice, after prior consultation with Commission Bond Administrator Joann Snyder.
- If the bond selected is Appendix A-2, the Applicant shall submit to Joann Snyder the original letter of credit surety and commitment letter (See Filing Requirements for Bonding, Appendix A-4). The letter of credit shall contain the following language verbatim:
“If for any reason the Letter of Credit is not to be renewed upon its expiration, the Bank shall, at least 60 days prior to the expiration date of the Letter of Credit, provide written notification by means of certified mail, return receipt requested, to the Chief Clerk of the North Carolina Utilities Commission, 4325 Mail Service Center, Raleigh, North Carolina 27699-4325, that the Letter of Credit will not be renewed beyond the then current maturity date for an additional period. Failure to renew the Letter of Credit shall, without the necessity of the Commission being required to hold a hearing or appoint an emergency operator, allow the Commission to convert the Letter of Credit to cash and deposit said cash proceeds with the administrator of the Commission's bonding program. Said cash proceeds from the converted Letter of Credit shall be used to post a cash bond on behalf of the Principal pursuant to North Carolina Utilities Commission Rules R7-37(e) and/or R10-24(e).”
- If the bond selected is Appendix A-3, the Applicant shall submit to Joann Snyder the original power of attorney and commitment letter. See Filing Requirements for Bonding, Appendix A-4.
Contact Joann Snyder, Commission Bond Administrator, if you have any questions at 919-733-7683 or firstname.lastname@example.org.