When it comes time to start a new electric plan, many companies require new customers to participate in a credit check or pay a deposit prior to starting service. It is the same approach that phone, cable, and other utility services tend to take with new customers, and it is often a process that requires hefty upfront payments or fees for those with less than perfect credit.

No Deposit Electricity

There are numerous companies offering no deposit electricity plans in Texas — Payless Power is one of the biggest and most well known.  They offer pre-paid electric service to thousands of customers in The Lonestar State.

Here are some current offers for no deposit electricity:

Provider Plan Name Electricity Rate Term Deposit
Payless Power SmarTricity True Value 9.5 cents /kWh Month to Month $0 (No Deposit)
Payless Power SmarTricity $100 Cashback 10.5 cents /kWh Month to Month $0 (No Deposit)
First Choice Power-To-Go Free Weekends 10.9 cents/kWh Month to Month $0 (No Deposit)
First Choice Power-To-Go Variable 10.9 cents/kWh Month to Month $0 (No Deposit)

Please note that these electricity rates are current as of time of writing and these are base rates — you need to refer to the EFL for any individual plan to get the whole scope of your electricity costs.   You can check the most current rates on on our site or by giving us a call at 800-974-3020.

Credit Checks for Electric Service

There are many reasons why utility companies and electricity providers conduct credit checks. Two of the biggest reasons for conducting a credit check include moving to a new residence or switching to a provider.

When an electricity consumer moves to a new home, it is common for them to also set up their electricity with a new utility company or electricity supplier (in deregulated areas within the US like Texas, Ohio, Pennsylvania, etc.). In this situation, the consumer has to apply for electricity services. As part of the application process, the utility and electricity provider will need to determine the consumer’s credit history. If the consumer has a poor credit history (or lack of history), it can become more difficult for them to receive electric service.

Deposit Required

Some — if not more than half — of consumers require a deposit. There are a few reasons why companies require this kind of payment. One of the most common reasons is if a consumer has a low credit score or bad credit history. Other reasons include customers who haven’t paid past bills, have been late on payments, and have previously had electricity disconnected.

In some situations, companies will waive the deposit if the customer is 65 years or older, has a letter of credit from their current electricity provider, or has proof of on-time past electricity payments. However, loopholes don’t apply to every consumer. Many are still required to pay a deposit before they can start a new electricity service.

Deposits for New Electricity Service

For customers who have had their electricity service disconnected, deposits are often required if not mandatory. In this type of situation, in addition to the deposit, the customer will need to pay the past-due amount, disconnection and re-connection fees. The amount of the deposit varies by company, but can range often reach hundreds of dollars.

The good news is, in most situations, the deposit is credited back to the customer’s account if they make continuous, on-time payments for a defined period of time. Other companies may give the deposit back at the end of the contract.

Letter of Guarantee

In special cases, a customer can provide a Letter of Guarantee to the electricity provider. This letter needs to come from someone other than the customer. The reason for this is because if the customer fails to pay their bill, the person that provided the letter becomes responsible for the payment.

No Deposit & Pre-Paid Electricity

As an electricity customer, it is so important to contact your utility or provider when financial problems arise. Most companies offer many different solutions to help customers keep their light on — especially electricity providers.

Many electricity providers will offer options like no deposit or pre-paid electricity. These options give consumers the power to start a new plan without the need for costly and inconvenient deposits.

No Deposit Electricity

No deposit electricity allows an electricity consumer to sign up for an electricity provider contract without a deposit, credit check or binding contract. For consumers that have bad credit, this means that they don’t need to pay hundreds of dollars upfront in order to receive electricity services.

When a customer is eligible for no deposit (and in cases where they are not), they are typically required to sign-up for a pre-paid electricity plan.

Pre-Paid Electricity

Pre-paid electric service also allows customers to sign up for a contract without a binding contract, deposit, or credit check. For customers who both quality and don’t qualify for no-deposit electricity, they are often required to sign-up for a pre-paid electric plan. This type of plan is very similar to pre-paid phone plans. When it comes to electricity, the customer is required to pay a small pre-payment amount towards their account to get the services up and running.

Once signed-up, customers will receive notifications regarding their daily usage and alerts when they are running low on credits. This means if the money the customer deposited into their electricity account is about to expire, they have the time and option to add more money to keep the electricity on and the account up-to-date. The customer only needs to pay in advance for the electricity that they need, when they need it.

Pre-paid plans represent a new era in the energy industry, particularly in the deregulated electricity markets. The reason for this is because energy deregulated markets give consumers the power to choose where their energy comes from. With pre-paid suppliers, individuals of all types have the power to enjoy affordable energy in a convenient pay-as-you-go set up.

Electricity Rates

The price of electricity (kWh rates) attached to pre-paid and no deposit plans are typically a little bit higher than those of “normal” plans.  This is due to the perceived elevated risk by the particular electric company offering those plans.

Customer Assistance

Contacting the utility for financial assistance will help a customer to better manage their electricity payments. Many companies are open to discussing payment arrangement options. Legal payment arrangements have several requirements including,

  • The customer must continue to pay the total amount future bills on time while making payments towards previous overdue bills.
  • Payments are still considered late, even with the payment arrangement in place. Customers need to inquire about how the company reports late payments to the credit bureau to determine the affect on their credit score.
  • If the customer continues to fail to make payments, the electricity will likely be disconnected.

Denied Electric Service

If a customer is required to pay a deposit, provide a Letter of Guarantee, or is denied electricity service they have the right to know why. The company must send the customer a notice within 30 days of the decision. The notice must either let the customer know that they have the right to access the information or define the reason for the decision.

Last updated January 28, 2017.