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Friday, July 12, 2024

What Are Prepaid Electricity & Energy Plans

And How Can a Prepaid Energy Plan Benefit You?

Home and business owners have a variety of options for energy plans in Houston. Fixed-rate energy plans are one of the most common because they’re easy for people to understand. With a fixed-rate plan, a provider sets the rate and will let you lock in that rate for a certain length of time, typically 6 to 12 months.

While most people are familiar with this energy plan structure, it’s not always the best option. Prepaid electricity plans can often be a better deal on energy, if not more convenient. Below is everything you need to know about prepaid electricity to understand how it can benefit your Texas home or business.

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What Is Prepaid Electricity?

Prepaid electricity is an option for energy service in which you pay upfront, and deductions from that balance are made as you use electricity. Providers of prepaid electricity can charge an account daily, weekly, or monthly. Here’s a breakdown of how prepaid electricity works (once you sign up for service):

  1. You will pay a certain amount, as the energy provider requires before you start using electricity
  2. The provider will attach a smart meter to the side of your home or business to monitor how much energy you use
  3. The meter will monitor your energy usage, sending this data to your energy provider routinely
  4. Your energy provider will then charges you based on the amount of energy used
  5. Once charges drain the balance to zero, you must submit another payment to the provider to continue with prepaid electricity service

Prepaid electricity with a metered electricity system is usually best for those who do not use a lot of energy.

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What Are the Benefits of Prepaid Electricity?

A prepaid electricity plan works well for a lot of individuals because it has many benefits. Here are the top five benefits of signing up for prepaid electricity. 

No Deposit Required

Everyone needs access to electricity, but for some, signing up for an energy plan can be difficult if they have bad credit or no credit. Prepaid plans don’t require a deposit, and they also aren’t dependent on your credit score, so you can quickly get set up with electricity. 

Discounts, Savings & Lower Energy Bills

Prepaid electricity plans can help you save money in a couple of ways. First, some energy providers will offer a discount when prepaid plan users maintain a minimum balance in their account. Second, a prepaid plan will show your daily energy usage, which helps people remember to conserve energy and use less power for a lower energy bill

Usage Monitoring

Another benefit of regular energy usage notifications is that it increases energy awareness. You can look at where energy is wasted and make a more concentrated effort to cut that waste. For example, if your bill has been high, you may shut off more lights and run the air conditioner less. As you become more aware of how you’re using electricity, you can start to make changes that will ultimately save you money on your energy bills.


Another big benefit of prepaid plans is their flexibility. Most prepaid plans don’t include a contract term. As long as you add money to your account, your electricity will stay on and keep providing energy. Since there isn’t a contract term, you also don’t have to worry about any fees if you decide to cancel your plan. For people who move around frequently or who are thinking about making a move, the flexibility of a prepaid plan makes changing locations easy. 

No Missed Electricity Bills

Monthly bills can bring a sense of dread, especially if you’re struggling financially. The great thing about prepaid energy plans is that you’re never issued a statement for your energy usage. Instead, you pay in advance what you can afford, and if you don’t have any money in your account, the electricity is turned off. No power is never fun, but at least you don’t have to worry about overdue energy bills piling up on the counter. 

Is a Prepaid Energy Plan Right for You?

There are a variety of reasons why prepaid energy is the best decision for you. No matter what financial situation anyone is in, everyone deserves great energy. Here are some of the reasons why prepaid energy is right for you: 

  • Credit Checks Won’t Hold You Back: Most energy providers require deposits that are often based on your FICO score or if the National Consumer Telecom & Utilities Exchange (NCTUE) has records of late or unpaid utility bills
  • Building Credit: If you are a young college student, a young adult out of school, or don’t have much credit and need to build more, learning how to navigate energy in your home independently is a necessary lesson to learn. Using a prepaid plan can establish a record of timely payments and an opportunity to start understanding how much energy you use
  • You’re on a Tight Budget: Easily track your energy and usage to make your bills work your budget
  • You Want to Conserve Energy: As energy conservation is a growing focus, learning how to minimize your energy consumption to conserve energy to a functional plan

Prepaid Energy Plans in Texas Can Help You 

Prepaid energy plans aren’t for everyone, but they shouldn’t be automatically ruled out when looking for a service. Instead, consider the benefits of prepaid energy and determine whether this choice would work best for your family.

If you decide to go with prepaid energy, don’t forget to pay attention to any discounts or associated fees. Many providers offer a discount for maintaining a minimum balance. Check the minimum balance and set an alert to receive a notification whenever your account gets close to that number. On the flip side, if your home or business doesn’t have a meter, you may be charged an installation fee. Finally, be sure to ask your provider for a detailed plan cost breakdown when comparing energy plans so you can find the best deal for your needs.

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