(1) Deposits plus accrued interest shall be refunded under the following circumstances and in the following form:
(a) Where the customer has for 12 consecutive months paid for service when due in a prompt and satisfactory manner as evidenced by the following:
(i) The utility has not initiated disconnection proceedings against the customer; and
(ii) No more than two notices of delinquency have been made to the customer by the utility.
(b) Upon termination of service the utility shall return to the customer the amount then on deposit plus accrued interest less any amounts due the utility by the customer for service rendered.
(c) Any deposit, plus accrued interest, shall be refunded to the customer in the form of a check issued and mailed to the customer no more than 30 days following the termination of service or completion of 12 months satisfactory payment as described above. Other methods of refund (e.g., cash) , if agreed to by the customer and the utility, are permitted. In the alternative, in the utility's discretion, unless the customer has specifically directed otherwise, the deposit may be applied to the customer's bill of service in the thirteenth and, if appropriate, subsequent months.