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Texas Prepaid Electricity Plans

With most Texas electricity plans, the energy provider bills the customer after the end of each billing cycle.  Customers pay their bills and process repeats.  However, because customers are paying after consuming the electricity, the energy supplier could be left holding the bag if the customer does not pay their bill.  This is why credit checks are a standard part of enrolling with a retail electric provider.  Retail electric providers have varying credit policies that trigger when a deposit is required.  Deposit amounts can range up to two months of average electric bills.  For some customers, having the deposit waived or coming up with large deposits are not realistic options.  What electric plan choices do these customers have in the Texas deregulated electricity market?

Prepaid Electricity Plans Components

Fortunately, prepaid electricity plans are becoming more widely available.  Prepaid electricity plans, as their name implies, allow customers to establish electric service without a credit check.  Prices and plans vary between electricity providers but the basic product structure is the same.  The three essential components are the connection balance, current balance, and the disconnection balance.

The connection balance is the amount required to establish service.  Texas PUC regulations cap this amount at $75.  Retail electric providers are free to set a lower requirement if they choose to do so.  Consumers should shop around to find a prepaid electricity plan with a great rate as well as a low connection balance.

Next, the current balance is how much the customer has remaining in their account.  The concept of a monthly billing cycle does not apply to prepaid electricity plans.  The conversion to smart meters has simplified the product offering for both customers and retail energy suppliers.  Smart meters allow the electricity provider to receive the customer’s usage information with about a two-day lag.  The smart meters also expedite the disconnection of electric service if the customer depletes their account.  Electricity providers send account balance updates to customers via text message to their cell phone, through email, or through calls to their landline or cell phone.

Finally, there is a disconnection balance.  When customers go below this balance, the provider can initiate disconnection of electric service.  The disconnection balance has a maximum limit of $10.  Residential electricity consumers accustomed to long, drawn-out disconnection procedures will find that prepaid plans work very differently.  As long as the electricity provider makes proper balance notifications, electric service disconnection can take place almost immediately.

Electricity Plan Fees

In addition to the electricity rate, there is usually a daily rate charged by the retail electric provider.  These rates usually range from around 25 cents to 50 cents per day.  There are typically fees for calling customer service, having electric service reconnected, and other interactions.  Prepaid electricity plans are not designed for a high level of interaction with the retail electric provider so read the Terms of Service to see if this type of plan works for you.

Finally, prepaid electricity plans are not available if anyone at the service location is designated as a critical care or chronic condition resident.  In addition, it is the customer’s responsibility to make sure the retail electricity provider has their correct contact information in order to receive the balance notices.  Otherwise, prepaid electricity plans are a good choice for customers who are having difficulty opening enrolling in a traditional electricity plan.

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