May 16, 2008 admin

Pre Buy Electric Company Profile

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Another Texas Electric Company down, Hit by Unhedged Energy and skyrocketing prices

Today it was announced that Pre Buy Electric has gone out of business. The way this company sold energy is pretty obvious from their name. The Texas electric provider would have their customers pre pay for energy so there is no need for a deposit and if they havn’t paid a previous electric company, well no problem you have to pre pay with Pre Buy Electric so the choice was simple for many people. One of the down falls of Pre Buy Electric Company wasn’t the fact that they had a customer base of about 9,000 bad credit risks because these customers bought their energy in advance so the risk was minimal to Pre Buy. The issue once again is bad risk management. What I mean by risk management is that Pre Buy Electric Company did not properly hedge their energy in the Texas market. In order to insure you make money and don’t expose yourself to a high level of risk an electric provider in Texas has to buy natural gas futures and then hedge this energy in case of any potential price volatility that puts their profit margin into backwards teritory. No one wants to lose money after selling an electricity rate to a customer but that is what several companies have done by putting themselves into the position of having sold energy without hedging it expecting the market to stay in a particular safe territory.

If you are one of the unlucky ones that were taken off of PreBuy Electric by the Texas government and put on the POLR rate you are paying a high inflated electric rate. You want to start shopping for an alternate electric provider as soon as possible as you will not want to pay a full months electric bill at the POLR rate. The POLR electric rate was created by the Texas grid operator as a back up plan if an electric company were to go out of business. We were told by Prebuy that they have not filed for bankruptcy but it looks like they may be scrambling to do something like this pretty soon as they have lost all of their 9,000 energy customers. Read below for low cost electric providers who will be happy to get you off the POLR rate and onto a more competitive electric price. Keep in mind that over 5 differnt electric companies in the months of APril May and June have gone under for similar reasons. It is important to pick a good provider. As of June 4th Etricity Electric Company is the latest provider to go under leaving 15,000 searching for a new Texas electric provider.

I am a PreBuy Electric Customer, What Should I Do?

PreBuy Electric has right under 9,000 customers which were switched to POLR or the provider of last resort at an inflated electric rate.* In Dallas Fort Worth the POLR company is TXU Energy and in Houston the POLR company is Reliant Energy. The POLR company was established as a back up so that if an energy company goes bankrupt the customers with that Texas electric company do not lose electric service. PreBuy ELectric failed to pay their financial obligations to the Texas grid operator, (The Electric Reliability Council of Texas) and were forced into bankruptcy. If you are a PreBuy Electric customer you want to shop for a competitive Texas residential electric provider as you are on the POLR uncompetitive rate that is meant as a temporary solution so you are not without power. The Texas POLR back up plan is a great idea but is only a temporary solution and is higher then the going competitive market rate.

The Texas Power Companies History

The senior business partners at PreBuy Electric pioneered the prepaid electric market in Texas and have been committed to remain the largest prepaid Texas electric provider. Prebuy Electric serves thousands of customers across Texas. PreBuy Electric was based in Bridgeport TX and is now in Grapevine Texas, PreBuy Power is led by an experienced team of energy managers who are experienced in the deregulated electric market. The pre paid electric provider uses innovative software, that appears to have given them some bad fundemental or technical signals, which was used to keep electric prices as low as possible for their customers. This company never charges a deposit and all Texas customers qualifies for their electric service. Prepay Electric’s slogan is “The PreBuy Advantage”.

Fly by Night Texas Energy Providers in a Similar Situation

Well the electricity market is at a 3 year high in Texas and Pre Buy Electric is not alone in a list of scandalous Texas electricity activities. Riverway Power sent out a notice to their customers that they would not be honoring their electric customers fixed rate energy agreements but would instead be raising the electric price much higher. In the middle of May 2008 not but a few days ago National Power Company had found themselves in a similar unhedged position as Pre Buy Electric. National Power also sent out a letter and told their customers that they coul not honor their fixed electric rate any longer but would be raising multiple fixed rate term agreements from around 11 cents kWh to 15 cents kWh. These issues have since been dealt with in short order by the Public Utility Commission of Texas, thank goodness.

Unable to Pass on Higher Electric Rate Costs

Pre Buy Electric is one of those electric companies that cannot pass on the cost of an unhedged energy rate as their customers never signed a term agreement and can get out at anytime. Of course, it is illegal for an electric company to break a fixed rate agreement but several have tried and been succesful. Recently Riverway and NPC tried to pass on their unhedged energy costs but the PUCT told them they must eat their losses. It makes you wonder of Pre Buy Electric will soon have Riverway and National Power Company following suit? I suspect many of Pre Buy Electric’s customers in Texas left when the rate got so high they couldn’t realistically justify paying such a high rate in comparison to paying a reputable electric company a small $200 – $500 deposit rather then pay an energy bill that would pay that and more in just a few months. It made sense for many of Pre Buy Electric’s customers to leave and find a cheaper electric company even if there was a deposit required. The deposit for most providers helps protect them from customers who never intend to pay their electric bill in the first place which happens more often then you would think. Some providers charge such a high deposit that it discourages anyone who would even think about not paying from even signing up.

Alternative Electric Provider for Pre Buy Electric Customers

If you need an alternative electric company besides the now bankrupt Pre Buy Electric we recommend a very good low cost Texas energy provider who has ethical business practices, a low electric rate, quality customer service, and I use them myself. They are a large electric company in Texas and are offering a discount electric rate to Pre Buy Electric Company customers. The name of the electric provider is Startex Power. You can sign up on their online discount electric rate below.

Pre Buy Electric Detailed Company Profile

Detailed Pre-Buy Electric Company Profile
Pre-Buy Electric is a private company located in Grapevine, TX.

Pre-Buy Electric’s line of business is Texas electric services.

Company Profile: Pre-Buy Electric
Year Started:2005
State of Incorporation:N/A
Location Type:Single Location
Stock Symbol:N/A
Stock Exchange:N/A
Also Does Business As:N/A
SIC #Code:4911
Est. Annual Sales:$130,000
Est. Employees:1
Est. Employees at Location:1
Contact Name:Criag Bolin
Contact Title:Owner
Contact Phone Numbers and Emails for PreBuy Electric Company
This company has been confused with the names Prepaid Electric and Prepay Electric, but is actually called Prebuy Electric which is very close in name and meaning.

*information gained from Tom Fowler with the Houston Chronicle: (

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About the Author

admin Donny started 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!

Comments (13)

  1. Jorge

    From what I understand, Etricity in Denton TX is went out of business, closed their doors and shut off their lights. You might want to check this out, but I understand they had over 12,000 customers that were dropped to POLR

  2. Karma Knows,

    Someone on this forum has posted that they have yet to see their $202 for energy purchased from PreBuy but not received. Why have they not received this money and does your company plan to send back the prepaid electricity purchased but not delivered by your customers?

    You can view this comment on the comments at this article:

  3. dPi Energy can take care of PreBuy's customers who were left hanging. Unlike most other energy companies, dPi Energy will never ask for a deposit, check your credit or require you to sign a long-term contract.

    Now that's putting the power in your hands.


    Does Prebuy plan to return the last month payment to everyone. They took our payments and some didn't know they were bankrupt. You didn't Prebuy pay the provider of last resort? They are threatening to put htis on customers credit. We can't even contact them !

  5. I signed up with Ambit Energy and saved over $3,000 per year. As of 10/03/2008, rates are as low as 11.8; depending on zip code. Take a look

    at They also have referral plan that can reduce your electrical bill to zero dollars every month!!

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