Deposits and credit checks

Texas rules let a retailer ask you to show satisfactory credit before it sells you electricity, and the rules list the ways you can show it. Every retailer has to accept two of those ways when you are applying for service: you are 65 or older and not currently behind on any electric service account, or you have been determined to be a victim of family violence.

The family violence certification letter was developed by the Texas Council on Family Violence. Any of these can make the determination behind it: a family violence center, medical staff treating you, law enforcement, a district or county attorney's office, the Attorney General's office, or a legal aid grantee.

Other ways of establishing satisfactory credit can also apply, including payment history or a credit rating. Which additional methods are available depends on the retailer.

The deposits a retailer holds from you cannot add up to more than one-fifth of what it estimates you will be billed over a year, or the estimated total of your next two months, whichever is larger.

You get the deposit back once you have paid twelve consecutive residential bills without a late payment. The retailer may return it as a credit on your bill rather than as cash. After a year of service you can also ask the retailer to recalculate the deposit against what you actually used. That is worth doing if the original estimate assumed a larger household than yours.

Your retailer has to write down its deposit policy, how a refund works, and the circumstances in which it can increase a deposit. That goes in either Your Rights as a Customer or the Terms of Service, both of which come with the plan. The Public Utility Commission of Texas sets these requirements in 16 TAC §25.478, its rule on credit requirements and deposits.

That rule covers retail electric providers. If a city-owned utility or an electric cooperative supplies your electricity instead of a retailer you chose, ask that utility for its own deposit terms.

A retail electric provider sells you electricity before you pay for it. You use a month of power and are billed for it afterwards. That is an extension of credit, and the retailer assesses the risk the way any business does before it extends credit.

A retailer may run a credit check when you enroll, and the result can be no deposit, a deposit, or a request for some other assurance. The retailer sets the amount, within the limits the commission's rule allows. A deposit is a decision about your credit, not about the plan you chose.

A retailer may set its own criteria on top of the state rules, and each one decides for itself whether to ask for a deposit at all. A deposit at one retailer does not mean a deposit at every retailer.

Before you enroll with anyone, check with two or three of the retailers whose plans you are considering. Ask each one what the deposit would be, whether it will accept anything in place of a deposit, and how long it would be held.

A prepaid plan is one you pay for in advance, with the balance drawn down as you use power. Texas rules do not allow a retailer to require a security deposit for prepaid service, which is why a prepaid plan can be advertised as no deposit.

Starting prepaid service can still cost money up front. Before it will turn service on, a retailer can require a connection balance of up to $75 from a residential customer. That balance is not held and returned to you the way a deposit is; it pays for electricity you then use. Those rules are in 16 TAC §25.498, the commission's rule on prepaid service.

The prepaid rule prohibits a security deposit; it does not itself prohibit a retailer from checking credit.

This site does not list prepaid plans.

This site does not check your credit, does not know what a retailer will ask you for, and does not filter plans by whether a deposit is likely. Nothing here requires an account.