Distributor security deposit: what it is, when it is paid and when it is recovered

What is a distributor security deposit?

A security deposit is a bond that is applied in both electricity and gas contracts and it is only charged in cases of new registrations, when you request an increase in power or in cases where you are looking to re-establish the supply.

It is a single payment and, as a general rule, a distributor's security deposit is paid in the first invoice. As established by law, a distribution company can claim payment up to a maximum of six months after the corresponding date.

When does a security deposit have to be paid?

For your distributor to request payment of this deposit, one of these three circumstances should occur:

• You are requesting a new registration: If it is the first time that electricity and/or gas is being registered at a supply point (home, business premises, company, etc.)
• You are requesting a power increase: If you would like to request higher energy power for your home, this will involve paying a distributor's guarantee deposit. If the installation is more than 20 years old, verification fees will also have be paid to conduct an inspection on the installation.

Re-establishing supply: when supply is re-registered, a deposit will also have to be paid. Extension rights will also need to be paid but only if supply is re-established after a period exceeding 3 years.

Where will you find the security deposit charge?

Even though we said that it is the distribution companies who receive the payment of this deposit, it is the retailer who is are responsible for invoicing and collecting payment of the deposit.

You will find the charge in your first invoice after registration, an increase in power or the restoration of supply, specifically in the section corresponding to "Other items".

How is the cost of a distributor security deposit calculated?

The distributor guarantee deposit is calculated depending on the power you have contracted. The calculation of the amount will also differ depending on whether the deposit is for electricity or gas.

• Price of an electricity security deposit: the prices of the deposit to be paid ranges from €10.54 to €13.10 per kW of power.
• Price of a gas security deposit: the amount is calculated with regard to the theoretical monthly billing corresponding to fifty hours of use of the contracted power.

Can a security deposit be refunded?

Since the function of this bond is to act as a deposit (just like when you rent a house), once the contract is terminated, you have right to have it refunded. Only as a result of non-payment will it be possible that you are not refunded 100% of the amount previously paid. The company has a maximum of three months to refund the money.

Endesa security deposit

As a general rule, an electricity guarantee deposit is refunded at the end of your contract. It may also be refunded by the new retailer in case you change your electricity company.

Although it is the retailer who processes the payment and refunding of a guarantee deposit, it is the distributor who manages it and it depends on the geographical area in which you have contracted the supply.

The refund of a guarantee deposit where the distributor is Endesa (E-Distribución) corresponds to Andalusia, Aragon, Castile-León, Catalonia, part of Extremadura, Galicia, Navarra, Balearic Islands and Canary Islands.

If you have any other queries on your bills or any specific questions on how to understand your electricity bill and how to understand your gas bill go to the "Advice" section.