Frequently Asked Questions (FAQ)
Bond Amount ranges from $100.00 to $100,000.00. Standard Rate is 10.000% per year; with a minimum premium of $100.00.
Utility Bond for Public Services in California — Modesto Irrigation District
Utility Bond for Public Services in California — Modesto Irrigation District (Utility Bond)
The Utility Bond for public services in California — Modesto Irrigation District (Utility Bond) is a financial guarantee required for most utility companies to operate in the state of California, particularly for Modesto Irrigation District (MID). This bond protects consumers and the government from fraud, contract violations, or other issues related to the activities of utility companies in California.
What does Modesto Irrigation District do?
Modesto Irrigation District (MID) is a public utility that provides water resource management and electricity services to residents and businesses in the Modesto area, California. MID distributes water for agricultural needs, manages irrigation systems, and generates electricity for urban and rural areas. The company’s primary goal is to ensure reliable water supply and affordable electricity to improve the quality of life and support the region’s economy.
Example: Boris and His Utility Service
Boris is a farmer who operates a small farm near Modesto. To irrigate his fields, he has contracted with the Modesto Irrigation District for water supply. During a dry season, Boris relies on regular water deliveries from MID to maintain his crops. Thanks to the reliable irrigation system provided by MID, Boris’s harvest was saved, and he was able to achieve a profitable season. In addition, Boris also uses the electricity generated by MID to power his farm, making his business energy-efficient and eco-friendly.
Key Points About Utility Bonds in California
- License Requirement: In California, most utility companies must provide a bond as part of the licensing process for utility operations.
- Consumer Protection: If a utility company engages in fraudulent activities or breaches its obligations to customers, consumers or the state of California may file claims against the bond for compensation.
- Bond Amount: Depending on the state and type of activity, the bond amount can vary. In the case of Modesto Irrigation District, the bond amount can range from $100 to $100,000. Utility companies only pay a portion of this amount as a premium, similar to an insurance premium.
- Utility Company Obligations: Utility companies must comply with all laws and regulations governing their operations. Violating these rules can lead to claims against the bond.
Example: How Boris Lost His Utility Bond
Boris owned a small utility company in the Modesto Irrigation District, California. He signed a contract to supply water to several residential areas but violated the contract by delivering water with insufficient pressure and quality. Residents filed complaints, and Boris’s company failed to meet its obligations. As a result, the state of California filed a claim against his bond, and Boris lost his bond, forcing him to cease operations in the utility sector.
Other Bonds
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How much does a Utility Bond cost?
The cost of a Utility Bond for Modesto Irrigation District varies depending on the bond amount, which can range from $100 to $100,000. The standard premium for a bond is 10% of the bond amount, equivalent to a minimum of $100 per year. Multi-year discounts are not available, and a signed application is required.
Frequently Asked Questions
- How long does a Utility Bond last? The Utility Bond for Modesto Irrigation District, California, is valid for one year, after which it must be renewed.
- What happens if a utility company violates the bond terms? If a utility company violates the bond terms, claims can be filed against it. This can lead to the company being required to compensate for damages and losing the ability to renew the bond.
- How much does a Utility Bond cost? The cost of a Utility Bond in California depends on the bond amount. The standard rate is 10% of the bond amount, equivalent to $100 per year for a minimum bond of $1,000.
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Execution Notes
Bond must have an original signed Attorney in Fact signature.
Filing Method
Executed bond must be filed with the obligee by agent/principal.
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