Trying to start electricity service and being asked to pay a big deposit can be frustrating, especially if you’re on a tight budget or need power fast. Many Texas energy companies require an upfront deposit based on your credit, which can mean paying hundreds just to get power. And in Texas, even folks with high credit may end up owing a deposit. However, you may have other options.
No-deposit electricity plans let you sign up without paying a security deposit. They’re designed to help those with low credit scores or limited funds get power without the extra cost. In this guide, we’ll walk through how no-deposit electricity plans work and how to find the best option for your home.
What Are No-Deposit Electricity Plans?
The name pretty much gives it away. A no-deposit electricity plan allows you to get service without paying an upfront deposit. During the enrollment process, providers often run a soft credit check. It doesn’t hurt your score, but it determines if you owe a deposit based on your score and payment history.
There are two ways to skip a deposit when signing up for an energy plan. One option is a prepaid electricity plan, where you pay for power in advance and add more funds to your account as needed. The other is a traditional plan with a deposit waiver, usually for those with strong credit and a good payment track record. Both options help you get electricity fast without the financial stress of a deposit.
Benefits of No-Deposit Electricity Plans
Here are some of the reasons you might choose a no-deposit energy plan:
- Minimal upfront cost: You can get your lights on without paying a security deposit. Choosing this plan type helps you cut down on extra costs, which is especially helpful when you have moving expenses or other bills to pay.
- Immediate connection: Many no-deposit and prepaid plans offer same-day electricity service. You usually have to enroll before a certain time of day, but don’t have to wait too long for power.
- No credit check: Prepaid plans let you skip the credit check entirely, but require loading funds into your account. This goes towards your energy payment. Traditional plans still run a soft credit check, but it won’t hurt your score. Providers use your credit history to assess whether or not you’ll owe a deposit.
- Flexible budgeting: You can pay as you go with a prepaid plan instead of paying all at once at the end of your billing cycle. You can load smaller funds regularly or post a larger amount on a day that works for you.
- Avoid late fees: You don’t have to worry about missing payments because you pay in advance instead of after usage with a prepaid plan.
- Works for all credit situations: These plans don’t rely on high credit scores to get started. That means you can benefit from no-deposit plans if your credit is strong or improving.
No-Deposit Electricity Companies
Energy companies in Texas offer no-deposit options to make it easier to get power. Some companies specialize in prepaid energy plans, while others waive deposits based on your credit history.
Note that where you live in the state may affect which providers offer service in your area. Major metros like Houston and Dallas tend to have more options, while smaller rural regions have fewer.
Here are a few no-deposit energy providers to consider.
Prepaid Electricity Providers
Payless Power
Our top recommendation, Payless Power, offers fixed-rate prepaid energy plans without a deposit or credit check. It covers deregulated areas in Texas such as Houston, Dallas, Fort Worth and Corpus Christi. You can secure your rate for six or 12-month terms and track your usage through daily alerts by text or email. In our review of Texas electricity companies, Payless Power earned 4.2 out of 5 stars. Its standout feature is its fixed rates, which protect from rate increases.
Pogo Energy
Pogo Energy offers variable-rate prepaid plans without long-term commitment or an enrollment deposit. The company does not run credit checks and provides same-day power when you sign up before 6 p.m. You can manage your account through a mobile app to track real-time usage and earn rewards with the Pogo Perks Program. Plus, Pogo Energy plans are 100% renewable to lower your home’s carbon footprint. Pogo earned a 4.7 out of 5 stars. However, we could only secure responses from a single Pogo Energy customer.
Traditional Providers with No-Deposit Options
Traditional Texas energy providers such as TXU Energy, Reliant Energy and Green Mountain Energy may waive deposits when you meet certain criteria. These are traditional energy plans and don’t have the “no-deposit” label. Instead, providers simply opt not to charge you a security deposit depending on your credit score and payment history.
The state also allows for deposit waivers under certain circumstances. You might qualify for a waiver under Public Utilities Commission of Texas (PUCT) rules if you’ve paid electric bills on time for the past year or are over 65 with no outstanding balances. The state also allows waivers for medical hardships or cases of family violence.
How Do No-Deposit Electricity Plans Work?
No-deposit plans work in two main ways, but may vary depending on the provider and plan type. Learn how each plan type works to decide which is best for your home.
Prepaid Electricity Plans
Prepaid plans have a pay-as-you-go model. You load money into your account before using power, and the provider pulls funds from your balance as you use electricity.
These energy plans work with smart meters to track your usage in real-time so you know when and how much energy you use. Providers send regular alerts so you know when funds are low. You can add more money anytime through a mobile app, website or in-person location.
Prepaid energy plans allow for more flexible payments since you can pay on your schedule instead of the energy company’s. However, prepaying requires you to closely monitor your energy usage and maintain a positive account balance. Your provider can shut off your power if your account reaches $0.
Traditional Plans with Deposit Waivers
Traditional postpaid plans aren’t generally advertised as no-deposit plans, but providers waive the fee if you meet the credit requirements. Under PUCT rules, you can also qualify for a waiver if you’re over 65 with no past-due bills, have a history of on-time payments, specific medical needs or have experienced family violence.
Qualifying for No-Deposit Electricity
There are two main ways to get electricity without paying a deposit. The first is to choose a prepaid plan, which is open to anyone regardless of credit. The second is to qualify for a deposit waiver for a traditional energy plan based on your credit score or other factors.
The PUCT provides guidelines for Texas energy companies, but each provider has slightly different rules when reviewing applications. Good credit, a strong payment history or special circumstances may help you skip the deposit and get service fast.
Credit Score Requirements
The PUCT doesn’t provide a specific credit score requirement, so it varies by energy company. It does mention that you must have a satisfactory credit score. The Texas Controller lists a score from 670 to 739 as good, 740 to 799 as very good, and anything above 800 is exceptional. Generally, the higher your score, the higher your chance of skipping the deposit. That said, our research indicates that most Texans should be prepared to pay a deposit of some amount.
Alternative Qualification Methods
You may still qualify to skip the deposit even if your credit doesn’t meet the requirements. Companies like TXU Energy and Reliant will waive deposits based on additional factors. You can find the details for your provider in the terms of service (TOS agreement). Here are a few you may find:
- Letter of credit or payment history: A letter from your previous energy company showing 12 months of on-time payments.
- Letter of guarantee: A friend or relative with good credit can co-sign your account and agree to pay if you don’t have the funds.
- Automatic payments: Some providers waive deposits when you enroll in autopay.
- Customer loyalty programs: Long-time customers in good standing may qualify for deposit waivers or account transfers without new fees.
- Family violence or medical hardship: Texas rules by the PUCT allow you to skip the deposit if you’ve experienced family violence or have certain medical conditions.
How To Sign Up for No-Deposit Electricity Service
Signing up for a prepaid or no-deposit plan is simple and quick. You can enter your ZIP code on a no-deposit plan provider website or marketplace like Home Energy Club to find options in your area. Once you choose a plan, you’ll provide basic contact information like your name, service address and payment method.
Prepaid plans let you pay upfront for your electricity and may activate service the same day. Traditional plans with waived deposits may involve a soft credit check to prove eligibility and may take longer. However, many energy companies offer same-day service on traditional plans.
Same-Day Electricity Connection
You can receive power the same day you enroll if your home has a smart meter. Each energy company in Texas has its own rules about the cutoff time for when they can guarantee power within 24 hours. But even if you enroll after that time, you may still get connected within 48 hours. We recommend signing up as early as possible in the day to avoid the cutoff hours.
Required Documentation
Here’s what most providers ask for when signing up for an energy plan:
- Name
- Service address
- Payment method
- Government-issued identification
- Social Security number or alternative ID
- Documentation for deposit waivers
Why Electric Companies Charge Deposits
Electricity providers charge deposits to lower the risk of unpaid bills while still providing customers with the electricity they need. Most companies return your deposit after 12 consecutive months of on-time payments. Some companies, like TXU Energy, add interest to your deposit payment as a credit on your bill. That makes it feel less like a loss and more like an investment you’ll get back with time.
Average Deposit Amounts
Texas electricity providers determine deposits based on your estimated energy usage and credit score. Based on PUCT rules, a deposit can’t be more than either one-fifth of your expected annual bill or the total of your next two months’ service, whichever is higher.
The average energy bill in Texas costs $179 a month or $2148 per year, which means your deposit could range up to $430. Your exact deposit will vary and may be lower, but this can provide a comparison point of what to expect.
How To Avoid Electricity Deposits
You can skip paying a deposit without signing up for a prepaid plan, but it takes some preplanning and effort. Here are two ways we recommend trying:
Improving Your Credit Score
Energy companies waive deposits when you have a high credit score because they don’t have to worry as much about you missing payments. You can improve your credit score by paying bills on time, not getting too close to your credit limit, having a long credit history and reviewing your credit report to make sure it’s accurate.
Letter of Guarantee Options
If you’ve been working hard to ensure timely payments and not pay a deposit for your next energy plan, consider sending your new provider a letter of guarantee. Your credit score might not be where you want it to be, but you can still waive the deposit with this document. Contact your current provider by phone or online and request the form, then contact your new energy company to submit the information.
Should You Get a No-Deposit Electricity Plan?
A no-deposit electricity plan is a good choice if you want to avoid upfront costs, need same-day service or don’t meet credit check requirements. Prepaid plans work well if you’re improving your credit score and don’t have funds for a deposit. However, you’ll have to load enough money into your account for the minimum balance, typically ranging from $40 to $70. We recommend exploring multiple energy plans and providers to compare rates and find savings based on your needs.
While you may save on upfront costs by avoiding the deposit, many no-deposit plans charge higher-than-average rates. Assess your usage and the rate per kilowatt-hour to determine if you’ll actually enjoy savings by skipping the deposit but paying a higher average rate.
Frequently Asked Questions
How do prepaid electricity plans affect my credit score?
Prepaid plans don’t require a credit check and won’t impact your score. Missing payments negatively impact your credit. Prepaying for energy usage ensures you don’t miss payments, protecting your credit score.
Can I switch from a traditional plan to a no-deposit plan?
Yes, you can switch providers in Texas if you find a better deal or want better service. Check your current plan’s details and cancellation fees in the electricity facts label (EFL). You may owe a fee if you cancel a fixed-rate plan before the contract ends. Note that when switching from a traditional plan to a no-deposit plan, you may find yourself paying higher rates than before. Carefully assess your energy needs and financial situation before signing up for any plan.
What happens if my prepaid electricity balance runs out?
Your light company can disconnect your power if your balance zeroes out. Most companies send alerts when you’re low on funds, so you have time to add to your account before that happens. You may have to pay a fee to restore your power if your balance runs out and your power gets disconnected.
Are no-deposit electricity plans more expensive?
Electricity rates vary by provider and location. Prepaid plans might be more expensive in some areas than others. You can check today’s rates by entering your ZIP code on a marketplace site like Home Energy Club.
Our Rating Methodology
The This Old House Reviews Team supports our energy provider ratings and recommendations with a transparent, research-backed provider review methodology. Our process includes surveying electricity customers in deregulated markets like Texas, analyzing customer review trends, conducting mystery shopping, and consulting with energy experts. Each provider is scored based on performance in customer satisfaction, loyalty, digital experience, and service quality to produce a final rating on a 5-point scale.