Prepaid Electricity — No Deposit Needed

October 10, 2012 

Texas Prepaid Electricity RatesSince Texas became a deregulated electricity market in 2002 consumers have had the ability to shop for their electricity provider.  Deposits are fairly standard for so-called “post-pay electric plans” for people who don’t have perfect credit.  Unless you have very good credit, you have probably had the experience of being asked for a deposit for electricity.

The answer for many consumers is prepaid electricity that requires no deposit.  No credit check activation of electricity is another benefit of these plans.  In fact, most electric companies look to minimize their risk by running credit checks before they will sell you electricity.

Because of the structure of the Texas electricity market, retail electricity providers are taking on risk when they agree to sell someone electricity.  To understand why it works like this you have to first understand how the electricity marketplace works in Texas.

There are many different groups that work together in a seamless electricity delivery process to get electricity into your home or business.  Retail electric providers buy electricity at wholesale prices from electricity producers which include: coal and natural gas power plants, wind farms, nuclear power plants, etc…  The power plant operators expect the retail electric provider to pay them for the electricity they buy regardless of whether the end consumer pays his bill.

That makes electric companies pretty much like any other retailer.  They buy from wholesalers and sell at a higher price to the end consumer.  That’s why they worry so much about customers not paying their bills.  They take a loss every time that happens.

Many electric companies look at credit reports to determine if someone is more likely to miss payment on their electric bill.  When this happens, they lose money because they must still pay the producer of the electricity.  Because of this risk, it’s hard to get no deposit electricity if your credit isn’t perfect., however, offers no deposit electricity for people who have credit problems or people who just don’t want to deal with long term contracts.  Our plans are all pre-paid electric plans with no long term commitments.