March 7, 2008 admin

Texas Power

Are you Looking for a Way to Avoid a Deposit?

Precisely every single provider will ask you for a deposit unless they are a prepaid provider. Why is this the case? The reason is simply because you are buying a commodity from a company that has bought that commodity as a large block purchase, they have than hedged their investment the same as a farmer would do to protect the profit in that purchase. They than create an electricity plan in hopes that several thousand customers will buy the plan in order for them to execute this all in a way that based on volume they make a profit.

Your Texas power purchase will not make a provider a profit if they take on a large percentage of untrustworthy customers that will default on their electricity bill and leave them with excess energy they could not sell at a profit. When bad customers default not only do they leave the provider with energy they needed to get rid of they also are out whatever money the customer did not pay them.

Because providers only make money if they sell their block of energy to at least 3,000 or more customers this takes a lot of planning to get this right and a part of this is that they have a very low percentage of customers who default. By necessity these Texas power providers must check your credit and if you fall under a risk threshold that statistically shows you have a high probability of defaulting well then they ask you for a deposit.

On top of checking your credit and asking for a deposit, providers don’t advertise what that credit score risk threshold number is or how much the deposit will be ahead of time. They need to keep this information secret to get a high number of sign ups because the more sign ups they get the higher number of customers they will get.

Since all providers that aren’t prepaid providers check your credit it makes no sense for a provider to tell you upfront if you fall in this category will most likely reject you by asking you for a deposit of said amount. This will cause most customers to move on to the next provider who is less clear about this but then asks you for the same thing. Eventually you get tired of the continuous game that is more of the same and you settle and pay a deposit with a provider after calling or checking online with a few.

The point I am trying to make is that with any traditional provider you have a big positive in that they offer some good standard long-term fixed rates such as a rate that remains the same for 1 year and is reasonably priced. Don’t feel dejected when they check your credit, find out your credit score is poor and go on to ask you for a deposit. They are simply protecting their large investment in energy and you just don’t meet the statistical odds of paying on time every time.

Don’t feel cheated but understand that in America there are usually a host of options and in this particular case it would be to avoid the deposit altogether by looking at Texas power choices that are known as prepaid electricity rates. These prepaid providers allow you to pay in advance to guarantee the provider always get paid and the positive trade-off for you is that you always have your lights on and no deposit is required.

Our comparison widget can show you some of these prepaid choices if you discover that a post-paid option doesn’t fit your situation because they all want you to pay a deposit.

You may call us to order over the phone or learn more by calling 1-800-971-4020

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About the Author

admin Donny started ElectricityBid.com back in 2007 from his parents basement and has since married his wife Melody and had three sons, John Adam (7) and Noah (4) and our new 20 month old son. He enjoys tech related things, softball, kickboxing, going to the gym, excursions and activities together with his wife Melody. Our service allows you to shop and compare commercial and residential electric rates and providers. Would you take the time today to try our service and see how you like it. Thank you! and God Bless You!

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