diff --git a/tripleoclient/exceptions.py b/tripleoclient/exceptions.py
index d0767e468..345118b35 100644
--- a/tripleoclient/exceptions.py
+++ b/tripleoclient/exceptions.py
@@ -60,3 +60,7 @@ class StateTransitionFailed(Exception):
 
 class ProfileMatchingError(Exception):
     """Failed to validate or assign node profiles"""
+
+
+class PasswordFileNotFound(Exception):
+    """Password file for the Heat stack not found in the current working dir"""
diff --git a/tripleoclient/tests/test_utils.py b/tripleoclient/tests/test_utils.py
index bbf4d85e7..00934b507 100644
--- a/tripleoclient/tests/test_utils.py
+++ b/tripleoclient/tests/test_utils.py
@@ -18,12 +18,12 @@ from uuid import uuid4
 import mock
 import os.path
 import tempfile
+from unittest import TestCase
 
 from tripleoclient import exceptions
 from tripleoclient.tests.v1.utils import (
     generate_overcloud_passwords_mock)
 from tripleoclient import utils
-from unittest import TestCase
 
 
 class TestPasswordsUtil(TestCase):
@@ -36,7 +36,8 @@ class TestPasswordsUtil(TestCase):
         mock_open = mock.mock_open()
 
         with mock.patch('six.moves.builtins.open', mock_open):
-            passwords = utils.generate_overcloud_passwords()
+            passwords = utils.generate_overcloud_passwords(
+                create_password_file=True)
 
         self.assertEqual(sorted(mock_open().write.mock_calls), [
             mock.call('NEUTRON_METADATA_PROXY_SHARED_SECRET=PASSWORD\n'),
@@ -59,6 +60,14 @@ class TestPasswordsUtil(TestCase):
 
         self.assertEqual(len(passwords), 15)
 
+    def test_generate_passwords_update(self):
+
+        mock_open = mock.mock_open()
+
+        with mock.patch('six.moves.builtins.open', mock_open):
+            with self.assertRaises(exceptions.PasswordFileNotFound):
+                utils.generate_overcloud_passwords()
+
     @mock.patch("os.path.isfile", return_value=True)
     @mock.patch("passlib.utils.generate_password",
                 return_value="PASSWORD")
diff --git a/tripleoclient/utils.py b/tripleoclient/utils.py
index 2be21de79..6401e5fbb 100644
--- a/tripleoclient/utils.py
+++ b/tripleoclient/utils.py
@@ -19,6 +19,7 @@ import hashlib
 import json
 import logging
 import os
+import os.path
 import passlib.utils as passutils
 import six
 import struct
@@ -53,7 +54,8 @@ _PASSWORD_NAMES = (
 )
 
 
-def generate_overcloud_passwords(output_file="tripleo-overcloud-passwords"):
+def generate_overcloud_passwords(output_file="tripleo-overcloud-passwords",
+                                 create_password_file=False):
     """Create the passwords needed for the overcloud
 
     This will create the set of passwords required by the overcloud, store
@@ -61,10 +63,17 @@ def generate_overcloud_passwords(output_file="tripleo-overcloud-passwords"):
     file already exists the existing passwords will be returned instead,
     """
 
+    log = logging.getLogger(__name__ + ".generate_overcloud_passwords")
+
+    log.debug("Using password file: {0}".format(os.path.abspath(output_file)))
+
     passwords = {}
     if os.path.isfile(output_file):
         with open(output_file) as f:
             passwords = dict(line.split('=') for line in f.read().splitlines())
+    elif not create_password_file:
+        raise exceptions.PasswordFileNotFound(
+            "The password file could not be found!")
 
     for name in _PASSWORD_NAMES:
         if not passwords.get(name):
diff --git a/tripleoclient/v1/overcloud_deploy.py b/tripleoclient/v1/overcloud_deploy.py
index f9ad8a9c7..697c4e098 100644
--- a/tripleoclient/v1/overcloud_deploy.py
+++ b/tripleoclient/v1/overcloud_deploy.py
@@ -51,7 +51,7 @@ class DeployOvercloud(command.Command):
     predeploy_errors = 0
     predeploy_warnings = 0
 
-    def set_overcloud_passwords(self, parameters, parsed_args):
+    def set_overcloud_passwords(self, stack_is_new, parameters):
         """Add passwords to the parameters dictionary
 
         :param parameters: A dictionary for the passwords to be added to
@@ -61,7 +61,9 @@ class DeployOvercloud(command.Command):
         undercloud_ceilometer_snmpd_password = utils.get_config_value(
             "auth", "undercloud_ceilometer_snmpd_password")
 
-        passwords = utils.generate_overcloud_passwords()
+        passwords = utils.generate_overcloud_passwords(
+            create_password_file=stack_is_new)
+
         ceilometer_pass = passwords['OVERCLOUD_CEILOMETER_PASSWORD']
         ceilometer_secret = passwords['OVERCLOUD_CEILOMETER_SECRET']
         parameters['AdminPassword'] = passwords['OVERCLOUD_ADMIN_PASSWORD']
@@ -90,11 +92,13 @@ class DeployOvercloud(command.Command):
     def _update_parameters(self, args, network_client, stack):
         parameters = constants.PARAMETERS.copy()
 
-        if stack is None:
+        stack_is_new = stack is None
+
+        if stack_is_new:
             parameters.update(constants.NEW_STACK_PARAMETERS)
 
         self.log.debug("Generating overcloud passwords")
-        self.set_overcloud_passwords(parameters, args)
+        self.set_overcloud_passwords(stack_is_new, parameters)
 
         timestamp = int(time.time())
         parameters['DeployIdentifier'] = timestamp
@@ -131,7 +135,7 @@ class DeployOvercloud(command.Command):
             ('NeutronMechanismDrivers', 'neutron_mechanism_drivers')
         )
 
-        if stack is None:
+        if stack_is_new:
             new_stack_args = (
                 ('NeutronNetworkType', 'neutron_network_type'),
                 ('NeutronTunnelIdRanges', 'neutron_tunnel_id_ranges'),
@@ -185,7 +189,7 @@ class DeployOvercloud(command.Command):
 
         if int(parameters.get('CephStorageCount', 0)) > 0:
 
-            if stack is None:
+            if stack_is_new:
                 parameters.update({
                     'CephClusterFSID': six.text_type(uuid.uuid1()),
                     'CephMonKey': utils.create_cephx_key(),