How much is your monthly electric bill? We’re sure the answer will always be — regardless of your electric rate — too much. Good news: many electricity providers in Texas, Pennsylvania, and other deregulated markets around the US offer different types of rates and plans for customers to meet individual budgets and needs.
One of these popular types of plans is called “pre-paid.” Pre-paid plans are more modern — they haven’t always been available to consumers like your run-of-the-mill electric plan has for the past century. Due to pre-paid services and plans in some other industries often being associated with consumers with poor credit, many energy consumers have also started to associate pre-paid electricity with bad credit and higher rates — which isn’t the case!
Many assumptions about pre-paid electricity just aren’t true — there’s a lot of stigma that needs to be debunked. In fact, signing up for a pre-paid plan can save consumers a lot of money, time and energy on a daily basis regardless of income or credit history.
What is Pre-Paid Electricity?
There is one major difference between pre-paid electricity plans and “traditional” electricity plans you probably see more often. With a pre-paid plan, consumers are required to pay for their electricity before they actually consume it. Customers who sign up for regular, more traditional electricity plans pay for the electricity they consume after it has been used.
It might help to think of pre-paid electricity like a pre-paid phone plan.
For a pre-paid phone plan, the customer might pay $20 upfront for a certain number of minutes and auxiliary services. It is then the customer’s responsibility to keep track of how many minutes they consume. The customer also has the option to add money to that balance when it gets too low. This action renews or updates the number of minutes they can then use.
The same concept applies to electricity. A consumer can pay $20 or $50 or whatever upfront for a particular number of kWh. As they consume electricity within their home or business, they can keep track of their usage and account, and top up the balance at any time.
Who is eligible for pre-paid electricity?
Pre-paid electricity is commonly available to consumers living in deregulated areas of the United States, including Texas, Ohio, Pennsylvania, New Jersey, Massachusetts, Maryland, Connecticut, New York, Maine, Illinois, Washington D.C. Delaware, Oregon and New Hampshire.
In deregulated areas, consumers have the option to choose the company that provides the supply part of their energy service to their home or business. Utilities remain responsible for both the maintenance and delivery of electricity, however, the markets are open to competition between established electricity suppliers. Since there’s competition, suppliers strive to provide the best options for consumers in order to attract and retain them over a long period of time.
If a consumer is not happy with their supply services, they have the option to search elsewhere (on ElectricChoice.com!) and switch over to a different provider.
Advantages of Pre-Paid Electricity
When pre-paid electricity options first hit the market, they were traditionally marketed to those with poorer credit. The reason for this is because the business model ensures that electricity suppliers are paid before the services are consumed or received. However, over time, electricity suppliers began to see the benefits to extending pre-paid offers so that more customers could receive the many different benefits of paying for electricity upfront.
Is pre-paid electricity a cheaper option?
One of the major stigmas associated to pre-paid electricity is that is a more expensive option. Many consumers feel that they will end up paying more. The reason for this is because they assume they will quickly consume their initial pre-paid amount and will need to constantly add to their balance.
The reality is pre-paid electricity plans actually help customers be more conscious of how much electricity they use. If a business consumer wants to limit their spending to $140 per week, it’s simple to make that happen. Daily usage updates ensure that customers stay on track and conserve energy in a way that fits within a specific budget.
For residential consumers, the same concept applies. If the air conditioner is turned on too high (or low) customers won’t have to wait until the end of the month to find out they’ve consumed much more electricity than usual. With a pre-paid plan, they will know immediately and have the time to fix the usage issue — before they get in a bill at the end of the month for $500.
Promotions & Discounts with Pre-Paid Electric Plans
Many electricity suppliers will also offer special promotions to customers who pre-pay for their electricity. For example, Payless Power, an electricity provider based out of Fort Worth, Texas will give customers a sizable discount if they maintain a balance over $35.00. This incentive brings the rate of electricity down to equal or even lower than many other electricity suppliers.
Other Pre-Paid Plan Advantages
There are many other advantages associate to signing up for a pre-paid electricity plan. These advantages include:
No Contract: For consumers who don’t want to sign a contract, pre-paid electricity is a great option. Suppliers don’t need a contract because payments are received upfront. In addition, consumers gain the freedom to use that electricity without locking themselves into an agreement they may not necessarily want.
No Termination Fee: Should the consumer decide to switch to a different supplier or plan, they do not need to worry about having to pay a fee or waiting a pre-determined length of time.
No Credit Check: With pre-paid electricity, it doesn’t matter what the customer’s past credit looks like. If they pre-pay for their electricity, the supplier receives payment and the customer receives their electricity.
No ID/SSN Required: Piggybacking off of the last advantage, since there’s no credit check, there’s no ID required. Both parties win in a pre-paid scenario because the supplier receives payment and the customer receives electricity. There is no need for the customer to prove who they are because they only get the electricity they purchased.
No Deposit: Many other plans require a deposit amount upfront before customers even start using electricity. These deposits aren’t small. They can cause a lot of frustration for customers who would prefer to actually use that money instead of having it tied up as a deposit. While pre-paid electricity requires a customer to pay an amount upfront, that amount is typically very manageable. Also, 100% of that amount goes towards paying for electricity consumed. It doesn’t just sit with the electricity supplier in some bank account collecting dust.
Same day connection: With pre-paid electricity, there is no disruption to any services. The switch is as quick and easy as if the customer were signing up for any supplier plan. As a matter of fact, signing up and getting service turned on with a pre-paid electric plan usually happens faster than it does with a traditional plan! There are even incredibly late cutoffs with some providers — you could sign up with a pre-paid electric provider at 4, 5, even 6 PM and still have service that same day!
Online Management: Customers can manage everything online including topping up any balance, set up, and more. The supplier will give the customer everything they need to ensure their electricity consumption is properly managed.
Pre-Paid Rates and Plans from Payless Power
Payless Power is a family owned Retail Electricity Provider (REP) based out of Fort Worth, Texas. Established in 2005, the company’s primary vision is to offer Texans electricity service with low rates and flexible payment options for both businesses and homes — they’re able to accomplish this in part due to their pre-paid electricity plans. These types of plans offer customers the ability to pay for their electricity as needed.
This REP has several different pre-paid plans for residential customers. Examples of some of these plans that we offer include:
SmarTricity True Value: For customers living in Texas, the current rate for this plan is around 8 to 11 cents per kWh, depending on your area (TDSP). This makes it comparable to many “traditional” plans on the market. For a pre-paid balance of $40, a customer can sign up today with no deposit and no termination fee. The customer also receives free same day connection.
SmarTricity $100 Cashback: This plan credits the customer with $10 per month for 10 months. It does not have any termination or deposit fees. This plan only requires a $40 pre-paid amount.
In general, customers of Payless Power can expect several things when signing up for a pre-paid electricity plan including:
- All customers are approved without a deposit amount
- Statement provided at the end of the month with average paid rate
- No charge for same day connection
- Usage and balance notifications provided daily via email, text or both
- Access to customer service
For more information on Payless Power and the plans that they offer, or any of the plans that we offer, please don’t hesitate to get a quote instantly online or call us at 1-800-974-3020.