Prepaid Electricity Plans in Texas

In deregulated areas of Texas, most Texans have electricity service by being in an electricity contract or in month to month holdover rates with electric companies. Both of those options are considered “postpaid” services, since you pay after you use the electricity when you receive your electricity bill. But did you know that there is another option for your Texas electricity? Prepaid electricity plans.

How Do Prepaid Electricity Plans Work in Texas?

Prepaid electricity plans, also known as “pay as you go” plans, operate entirely differently from the normal postpaid electricity contract. Essentially, you put some of your money in as a credit balance, and that balance is chipped away at by how many kilowatt-hours you use that month in real time. With the more common postpaid electricity plan, you would pay a bill once a month for the electricity you used during the past billing cycle. With prepaid plans you wouldn’t even have a monthly bill or long-term contract. Sounds kind of nice doesn’t it? Well, as with most things in life, there are pros and cons to prepaid electricity plans.

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Are Prepaid Electricity Plans Right for Me?

One of the biggest benefits of a prepaid plan is that it wouldn’t require a credit check. It also could have no deposit upfront.

In a traditional postpaid electricity plan, if you have a credit score or credit history that’s deemed insufficient while signing up for a plan, you will be required to pay a deposit between $100 to $450 before you begin the contract. You can sometimes avoid paying a deposit depending on the company’s policies. Some policies will waive a deposit by providing a Letter of Credit (LOC) from a past electricity provider proving a history of on time payments or submitting waivers if you’re 65 years or older for example.

Despite not requiring deposits, prepaid electricity plans still require payment to get started. This is referred to as a connection balance. This fee can vary but is usually around $20 to $75.

Once you get started with a prepay plan, you can monitor your electricity usage and credit balance through text messages, emails, or member accounts depending on the company you sign up with. Be careful though, if you’re not one to constantly check in electronically, prepaid electricity is not going to be the right choice for you. With prepaid plans there is also something called a disconnection balance. That is a minimum amount of money you need to keep in your credit balance or your electricity will be shut off. You can usually find these fees listed on your plans Electricity Facts Label (EFL).

According to the Public Utility Commission of Texas (PUC):

If your current balance falls below the disconnection balance, your service will be disconnected with little notice. You will be notified one to seven days before your account balance is expected to fall below your disconnection balance. If your account balance falls below your disconnection balance more quickly than expected, service may be disconnected in as little as one day after you receive the low balance notification.

For more information on what the PUC states about prepaid electricity plans, take a look at their Prepaid Electric Service FAQ page.

Texas Prepaid Electricity Plan Rates

Most prepaid contracts tend to be variable rate plans which is something Energy Ogre avoids. Variable rates mean that the price per kWh you pay will change monthly. Usually, variable rates are higher than rates offered in low rate fixed rate contracts. For more information on fixed rates, variable rates, and more, check out What’s the Best Type of Electricity Plan?

In recent times however, a couple of fixed rate prepaid energy plans have popped up that are competitive compared to postpaid contracts of the same term length. Those may sound alluring but still adhere to the unique rules of prepaid plans and also have early termination fees (ETFs).

Prepaid Electricity Plan Benefits

A benefit of prepaid plans is that they can help you if you’re in a bind with same-day service. For example, need electricity on a Saturday and can’t get in contact with any major Retail Electricity Provider (REP) since they're closed? Some prepaid companies are open on Saturdays to be there for you and help you get power if you’re caught in an unfortunate situation. 

Another example could be when you’re closing on selling your home. You’ve already scheduled to have the electricity shut off in your name today but then the closing date changes. Now you have to scramble for electricity for an extra few days. You’ve called your old REP but they can’t set your old contract back up. A prepaid variable rate would be the way to go. Get power restored, load up your credit balance, and then call them whenever you’re ready to cancel without an early termination fee.

Prepaid Electricity Plan Fees

One of the most overlooked parts of prepaid plans are the fees associated with them. If you’re able to keep your credit balance at or above the minimum balance required, you should have nothing to worry about. However, if you let things slip through your fingers, you may be in for a surprise. If your power gets turned off, be prepared for the possibility of a disconnection fee. When it gets turned back on, don’t be surprised if there's a reconnection fee. Some prepaid plans also require autopay and add additional fees for any manual payments made. In some cases, you can even get charged if you want a paper copy of your usage and payment history for that specific company.

Long story short, prepaid electricity plans can come in handy for you if you constantly monitor your usage, whether it be through your phone or computer. But since most people don’t have the time or interest to check their usage amount and credit balance multiple times a day, postpaid plans are the simpler way to go. And for the most part, postpaid plans are cheaper anyway.

Does Energy Ogre Use Prepaid Electricity Plans?

Energy Ogre does not enroll our members in prepaid electricity plans. We only enroll members into competitive postpaid fixed rate plans fitting their specific energy usage needs. We evaluate all available electricity rates, finding the right solution for each member. We even get custom rates not available to the public. 

Once we find your tailor fit plan, we submit all the necessary documentation and your enrollment. And that’s not the end of Energy Ogre’s services! We continue to monitor the market while you’re in contract and can switch you if a better deal pops up. We also have a great customer service team right here in Houston to answer any electricity related questions whether you’re a member or not. Stop worrying about your energy bill and payment plans. Let us deal with the hassle of finding affordable electricity.

For more information on how Energy Ogre makes handling homeowner’s electricity needs effortless, click the button below!

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