Some new and existing Lubbock water customers will be required to pay a deposit on their service beginning in January under a recently passed city ordinance.

The City of Lubbock says deposits will be required next year for new or transferring customers who do not have good credit or cannot provide a good payment history from another utility provider. Deposits will be required for existing customers who committed utility fraud or tampering or had their water disconnected for non-payment.

The new deposits serve "as a security measure, ensuring that city utilities have some financial protection in case the customer fails to pay their utility bills or defaults on the account," the city said in a news release. "The deposit service agreement will also provide the city with financial capability to maintain services in all of its operations."

Both residential and commercial accounts will be subject to the new deposits. After 12 months of good payment history, the deposit will be refunded as an account credit.

The move comes in the wake of electric utility deregulation in Lubbock. All Lubbock Power & Light customers moved to the competitive market in March, meaning LP&L would no longer send utility bills or collect deposits on behalf of the city.

"Lubbock Power & Light was, for decades, collecting deposits on behalf of all the utilities," said Greg Baier, interim director of water utilities for the City of Lubbock. "The ordinance used to state that the water utility would not collect a deposit, but it was amended after deregulation. When LP&L moved into the deregulated market and they no longer collected a deposit, it was important for the City of Lubbock Utilities to collect it for the water utilities."

The change takes effect Jan. 1, 2025.