When You Only Use 500 kilowatt hours and under a month

I was recently asked for help from a friend at my church who is a widow and only uses 500 or less kilowatt hours a month. She wanted to save money by shopping each year for the cheapest electric rate. She didn’t mind the hassle of shopping each year in order to shave off a little from her energy bill.

I came over to her house and we went through the providers looking for one that would save her more money. Each provider would ask for a deposit even though she had good credit and had been paying her bill on time every month. It didn’t make much sense because she was an excellent customer, why is there a deposit?

The deposit requirements have more to do with trade secrets the electric companies keep close to the chest than whether you are a good honest paying customer. The finer details on why each provider asked for a deposit is something that I could not make clear because the providers are not clear on this either.

What she had going for her is that she had paid her electric bill on time each month and was in good standing with her current electric company. The rates to renew with her current provider weren’t too bad in comparison with the providers we looked at when shopping. I told her if she renews with her current provider she will not be asked for a deposit because she is in good standing with them.

My friend only had $600 in savings in her bank and so taking $200 out of that account to pay an electric deposit just didn’t make sense for her situation. By renewing with her current provider she kept a good buffer in her savings account and still saved money. The renewal rate was not enough difference in cost to make much difference compared to going with someone different.

For those in a low income situation just starting out, you may have to initially pay a deposit with a traditional electric company. Keep in mind though after 6 months to a year the electric company will no longer ask you for a deposit if you renew with them. Showing you are a good paying customer with an electric company will help guarantee that provider will be more lenient in not asking you for a deposit in the future.

There are also “no deposit electric companies” but these companies aren’t always the cheapest. It pays to consider what it means for someone in a low income situation to sign up with a regular electric company that checks credit. They initially will ask for a deposit, but future years provided you are a good customer will show that they will waive future deposits.

With Texas State Assistance Why Are Prepaid Electric Providers Necessary?

You would think that with all the government assistance programs these days there would be no need for these prepaid electric companies that get you to pay in advance for your electric service.

In reality the state services are not used by many people that qualify simply because there are plenty of hurdles for most of us just to get that assistance.

For instance, the reason people choose to go with a prepaid provider is because they were asked by a traditional company for a large deposit.

Now comes the need for a way to waive your electric deposit. If you call one of the many organizations that work in tandem with the Department of Health and Human Services they will tell you what you need to do to qualify.

You must as a start be a disabled adult. If you are disabled and show proof that your life is in danger by use of a doctor’s note faxed or emailed to your electric provider you can receive a waiver for your electric deposit.

Many of us have some disability and I venture to guess if you contacted the right doctor you could even get a psychologist to justify a reason that it is medically necessary that your electric deposit be waived.

Fortunately not everyone is out to work the state government system to that degree but yet there are people out there that make their whole existence about working the system in every way possible.

For the rest of us who simply have bad credit, low credit, no credit, or just don’t like dealing with a bureaucracy a prepaid provider is your best choice for waiving your electric deposit.

On average you will spend about $400 more annually by choosing a prepaid provider but since smart meter technology has gone into full effect this disparity is dramatically dropping.

You can now sign up with many prepaid providers in the market at exactly the same prices traditional electric companies charge.

How is this possible? The smart meter precisely measures your electric usage at the meter and sends it real time so your money is charged against this usage more accurately than ever before.

No longer are the days of estimating your electric usage based on a prior tenant who lived at your home or apartment a year ago.

In the past people would sometimes be charged $200 more per month than what they actually used because of estimates like these.

After 6 months to a year of inaccurate measurements a correction of charges called a true-up was made and the customer would be refunded the extra money they were charged.

There is now no reason to estimate usage with real time data available and so more people who want to keep that extra $300 – $500 in their pocket are doing so.

Electricity deposits can be very expensive but the prepaid provider offers the easiest manner of avoiding that large fee and getting lights on fast.

Our comparison tool in green offers both traditional and prepaid electric companies. Enter your zipcode and give it a whirl! 

Nations Power Prepaid Texas Electric Company Review

I discovered a new prepaid electric company opened up in Texas today called Nations Power. This company offers a fixed kilowatt hour rate as well as a variable pay what you can plan.

Regardless if you go with a traditional electric company that gives you 30 – 45 days to pay your bill or you go with a prepaid provider where you pay in advance I would choose the fixed rate every time.

Many electric companies will not hesitate to raise your variable rate on you beyond what you were expecting.

It is true not all variable rate plans are bad but to be on the safe side a fixed electric rate with Nations Power is probably the way to go.

The reason you would want to order electric service through a prepaid electric company like Nations Power is if you know you will not be able to afford deposits by other providers.

The Texas government does offer assistance to low-income families for deposits and rate subsidies but for most of us the hassle in qualifying for these assistance programs is simply not worth it.

If your credit is okay or bad you will likely have to pay a deposit with most all the Texas electric companies.

For instance, if you call TXU and Reliant they will likely both ask for a deposit ranging from $200 – $500 depending on how bad your credit is.

Of course if you have good credit no deposit is needed. Now lets say you have called these two large electric companies, TXU and Reliant, if you go on to call Bounce, Green Mountain, and Texas Power they will likely ask for a deposit as well.

Why would all these providers ask for a deposit? They all work from a credit checking service to manage their risk. There is about a 50% customer default rate below a certain credit score number and what score this is remains a tightly held secret.

There is simply no way of working with a provider that bills you 30 days out for service in negotiating a deposit and that is why a company like Nations Power can come in handy.

By going with a prepaid electric company you avoid the deposit but will sacrifice on price. Most prepaid electric companies have higher prices than traditional electric companies that check your credit.

Nations Power is based out of Allen Texas and has recently launched their company as a Texas prepaid electric provider. You may reach them at (866) 356-6850.

If you have used this prepay electric company please give our community feedback in a review format in the comment section below.

Interesting to note, the company with the same PUCT license number is Catalyst Energy Inc. which is a PA oil and gas exploration company. The activities of Catalyst encompass the exploration, development, production, transmission and processing of oil, natural gas and liquid hydrocarbons. Since Texas relies on natural gas for the production of much of the electricity it is worth noting that Catalyst now has a stake in both the production and retail aspect of natural gas. There is often an inverse relation to the cost of producing electricity using natural gas and the actual cost of natural gas. If these two factors of natural gas price and “heat rate” are managed well there can be a big payoff in being in the production and retail side of natural gas. Most important is to not gamble to much in the process of doing both.

DPI Energy a Prepaid Electric Provider Requests Permission to Sell to TruSmart Energy Holdings

DPI Energy is one of the popular prepaid electric companies in Texas but like many prepay companies there are often challenges with staying within PUCT rules and regulations to operate as a licensed Texas electric provider. DPI Energy’s owner, Amvensys Capital Group LLC. has requested PUCT approval to sell all of DPI’s units to TruSmart Energy Holdings LLC.

One of the PUCT points when a change of ownership is made is that it is not used to get around a rule or regulation while yet still maintaining similar management or ownership however behind the scenes and hidden they may be. From the PUCT research they conclude that the sale appears to consistent with the terms if the settlement agreement from Sept 15th 2011 as written about on the PUCT website.

Once the PUCT staff have received all exhibits and schedules of the sale agreement they will be able to make final recommendations to the commission of the sale and proceed with allowing it to take place. The change of ownership application was received on October 6th and is being reviewed. The staff has until October 24th to file recommendations regarding this sale. So long as the commission finds that the sale agreement complies with the terms of the settlement previously established by the commission and DPI they sale and change of ownership should go through.

There will be a change in ownership and control as well as technical and managerial qualifications. TruSmart will show proof of shareholder equity in TruSmart no less than $1 million dollars and a stand by letter of credit payable to the PUCT commission of $500,000. These requirements insure that the electric customers and ERCOT are protected against possible bad execution, default, and bankruptcy of the electric provider. TruSmart currently has Texas electric customers and is in compliance with all PUCT rules and has no history of default with their load servicing company.

This sale should be a big positive in an industry that has seen its fair share of prepaid electric companies keep prepayments and true-ups of their customers and close down business leaving the state with huge profits instead of selling when it was expedient and right to do so.

Prepaid Electricity Company Rules in Texas

The PUCT of Texas has written some new rules for the public to review about if prepaid electricity companies in Texas should begin transitioning their customers over to a HAN device (Home Area Network). This is typically a ZigBee Smart Energy chip on the meter that allows a home electric meter to send back real time prepaid electricity data to the electric utility. As of June 2009 there were no commercially available in-home devices for checking your real time prepaid electricity meter data however the PUCT has made it available on their portal but you have to wait one day before you can see it. Start looking out for the smart meter Texas portal which will be available for anyone with a smart meter as well as those prepaid electricity customers using a smart meter and Zigbee smart meter chip to allow prepaid information to transfer over to the electric utility. At this time this smart meter payment system is not available for prepaid electricity customers in Texas. You will need to continue to use Ace Cash, telephone payment, and other arrangements.

How Often Can Prepaid Electricity Payments be Made?

A prepaid pay as you go electric company in Texas must allow you to make payment weekly. So if you want to prepay for your electric service every week they cannot decline your payment. The prepaid electric company must let you know atleast every two weeks what your estimated current balance is, the time and date, and estimated number of days of remaining electric service on your account.

A prepaid electric company must respond to your request to what your remaining prepaid balance is by atleast the following day prior to 5 p.m.

How To Qualify For An Electric Rate Discount?

If you qualify for an electric rate discount from the Department of Health and Human Services and the Texas Lite Up program then the prepaid electric provider must assist with working with these agencies. The pay as you go electric company must assist with provisioning energy assistance that comes from DHHS or Texas Lite Up.

It should be noted that a prepaid electricity company is not responsible for making sure your information is accurate with the DHHS. If there is even a difference with a phone number or date of birth you will be declined by Texas Lite Up. Unfortunately Texas Lite Up does not communicate this to the electric company so you will want to call and find out from both the provider and Texas Lite Up what information they have on file for you is. Everything must match or your assistance will be declined.

If you qualify for food stamps or other government assistance you will automatically qualify for energy assistance provided your information is the same at both places. Be sure to check!

Why Not Use a Traditional Electricity Company in Texas?

Considering that prepaid electricity companies in Texas charge the highest energy prices among all providers why not pay a deposit and save several hundred dollars? If you are considering a pay as you go Texas electric company you are likely a low-income electric service customer. The department of health and human service and Lite-Up Texas already have a rate assistance program for you. Texas electric companies are required to work with DHHS low income residents in working out arrangements to lower deposit amounts as well as your per kWh electric rate. Prepaid electric companies will end up costing you a fortune but a traditional electric company will give you a cheap price for energy and you can avoid the deposit. Try some of these traditional electricity companies in Texas first before going with a pay as you go energy company. You can try Champion Energy, Bounce Energy, Ambit Energy, TXU Energy, Startex Power, Green Mountain Energy, Reliant Energy, and the list goes on. Some will be easier to work with than others but ultimately your price per kWh and customer experience will be better served with one of these electric companies than by using a pay as you go provider.

Required Notifications To Help Avoid Being Disconnected

At the time you enroll with a prepaid electricity company you should be notified by them about how and when payments should be made. How and when account statements will be made available to you. How is electric service usage estimated. If you will receive a notice to pay for more service prior to being disconnected. When will these statements be delivered and how long after delivery do you have to prepay before disconnection. How and when you will be told of your remaining electric usage balance including time and date, and estimated number of days left.

Understand Your Fixed Electricity Rate

If your pay as you go electric company is offering you a fixed electricity rate they are required to disclose: price per kWh, number of kWh the fixed cost is based on, a statement about whether the price will change and why. Some electricity companies are advertising a fixed price based on teh current market prices but when your electric switch occurs charging you a different price. Be sure to watch out and ask about this practice before choosing a prepaid electric company.

A Facts Label Clearly Identifies What Makes Up Your Electric Rate

An electricity facts label is required by the PUCT to be offered to a pay as you go electricity customer. The facts label is like a food label on a can of food and should spell everything out for you. Some providers however will quote one price on the Facts Label and charge you something different. They get away with this practice because they say the price on the Electricity Facts Label was based on that date and not the date of the electric switch. Be sure to ask about this before choosing an energy company.

How Long Do I have To Change My Mind?

You have 3 days to change your mind about signing up with your prepaid electric company. The 3 days starts when your electric service is officially switched and turned on and not when they receive the contract from you.

Is The Advertised Electric Rate What Your Are Paying Now?

A prepaid electric company cannot charge more per kWh than what the provider of last resort is charging. You will have to contact the PUCT to see what the POLR rate currently is.

Somewhere on the electricity bill you should see something that says, “the average price you paid for electric service is”. This will be the electric rate per kWh you are paying. Make sure this rate matches what they advertised to you.

Pay As You Go Electricity Usage Estimates

The prepaid electricity provider should use historical electricity usage data that you have accumulated to revise their usage estimates. If your prepaid electricity company is using estimated usage from the previous tenant even though they have several months of your usage data they could be overcharging you by a lot.

Prepaid Electricity Bill Due Dates

A payment due date should be listed on the electric bill you receive from your pay as you go electric company. Be sure to look out for this.

If the Texas prepaid electric company has a 24 x 7 call center or payment center receive payments than they can make the bill due no later than 5 days after you receive it. Make sure you send in payment or you could risk a disconnection. I would try making payment late in the night to test whether or not they have a 24×7 payment center as this 5 day due date can be a little difficult especially if there are times when you cannot pay.

If the pay as you go electricity provider does not have a 24 x 7 payment center than the due date cannot be less than 10 days after the customer receives the bill.

If your bill is sent by email then according to the PUCT you received it the day the electric provider emailed it to you.

When Is A Prepaid Electric Bill Considered Late?

Your electricity service payment is considered late if it is not received before close of business on the payments due date. During holidays the electric bill due date is extended to the next business day after the holiday.

Prepaid Electricity Facts Label

Your electricity facts label should indicate the number of days a payment of $20, $50, $100, and $200 can be expected to last at monthly usahe levels of 500 kWh, 1,000 kWh, and 2,000 kWh.

The Proper Disconnection Notice You May Receive From A Prepaid Company

The disconnection notice can be sent along with your electric bill or request for a deposit. “Disconnection Notice” should be prominently displayed on the notice. The disconnection date cannot be a holiday, weekend day, or day that the REP is not available to take payment. The disconnection cannot occur less than 5 days after the notice is issued if they have a 24×7 payment center. If the prepaid electric company is not open all hours to take payments then you have a full7 days to make your late payment before being disconnected.

Being Underbilled For Several Months

If you were underbilled for several months and then all of a sudden you receive a gigantic electric bill you have some options. The PUCT allows for you to be put on a deferred billing arrangement with your pay as you go electric supplier. You can pay in $50 installments until you have paid back the underbilled amount without being disconnected for non-payment.

Electric Service For Critical Care Customers

If you have a serious illness and tell the electric provider that if they were to disconnect you it could cause serious harm to yourself and even death than they must send you a waiver. The waiver basically states that you agree to be disconnected if you make a late payment. If you choose not to sign this waiver the REP must switch you to another product or electric provider that avoids a disconnection in electric service.

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