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Grand Island council adopts ordinance to set higher deposits for very large new electric accounts
Summary
The City Council approved Ordinance 10062 to allow commercial/industrial deposits equal to two times a monthly bill for new customers with demand of 1,000 kW or more; staff said the threshold targets very large new loads while some council members warned of business deterrence and shared risk for ratepayers.
The Grand Island City Council on Feb. 10 adopted Ordinance 10062 to allow higher security deposits for certain very large new electric customers.
Utility presenter Ryan Schmitz told the council the change would allow deposits equal to two times a customer’s monthly bill for new accounts with a demand of 1,000 kilowatts (kW) or greater — a threshold Schmitz said would affect only new industrial‑scale loads. "We're not asking that here tonight for existing customers," Schmitz said, adding the measure is intended to protect the utility from the risk posed by unusually large loads.
Schmitz outlined the ordinance's context: Grand Island’s commercial deposit cap has been $2,000 for decades, and when adjusted for inflation that figure has declined in real value. He presented recent collection statistics — roughly $275,000 sent to collections in 2025 with about $27,000 recouped — and said the proposed approach is a standard utility practice for protecting ratepayers from concentrated risk.
Several council members acknowledged the logic but urged caution. One council member said the city should avoid making deposits so large that they dissuade businesses from locating in Grand Island. "I don't want the rest of the community to take over responsibility for the risk," a council member said, urging that contract terms for high‑use customers account for risk. Schmitz said alternatives such as surety bonds or irrevocable letters of credit were contemplated as options for large customers.
Council president O'Neil moved to adopt the ordinance; the motion was seconded and the council voted to adopt Ordinance 10062 on second and final reading.
The ordinance was presented as applying to new accounts above the stated demand threshold; the council discussed safeguards including alternative security forms and letting contracts allocate risk. The city will implement the change as ordinance language takes effect per the statutory schedule for adoption.
