Frequently Asked Questions of Electricity Shopping in Texas

If you are moving from one house to another, or are considering changing your providers, it’s likely that you’re trying to shop around for different electricity providers in your area – and that’s a good thing.

There are dozens of electricity service providers in Texas – it can be a daunting task to find the right provider for you, partly because the companies are not created equal, and also because Texas has a deregulated electricity market. Educating yourself about the market and its offerings is perhaps the best way to ensure you get the most out of your shopping experience.

Here are some frequently asked questions about electricity shopping in Texas. They will help address some, if not all, of your concerns and issues around the process.

How do I identify the cheapest electricity option for me?

The Texas market has so many affordable electricity provider options to pick from. However, if you are trying to find the cheapest one, you can compare different options head to head using a trusted energy solutions website. In this case, you’ll need to enter your zip code and indicate the amount of energy you use and your current supplier (this process may vary depending on the site you’re using). The results will show the providers in your area offering cheap electricity plans and rates. Some platforms can even assist you to pick the best option for you.

I have a bad credit history, what options do I have?

Finding cheap electricity when you have a bad credit history can be daunting, and it gets even tougher when you have a poor account of utility payments. But bad credit shouldn’t mean that you have to go without electricity. If you have been denied these services – or think you’ll have a hard time getting the services – you can try any of these three options:

Pay a deposit: most providers will need you to pay a deposit, which based on your creditworthiness, could be as little as $50 or as much as a few months of average power fees beforehand.

Choose a provider with lower credit requirements: if you don’t want to pay a deposit, you may want to shop around for a traditional plan from a provider that offers lower credit requirements. Often, these providers have a huge client base, so their risk is spread.

Pay as you go: the third option is to get a provider that allows you to pay as you go. Since you’ll be paying for electricity in advance, you won’t be subjected to the harsh credit regulations; there also will be no deposit.

What is a Letter of Authorization (LOA)?

Retail electric providers are needed to submit a signed LOA from the consumer to obtain historical usage or any other information before enrollment. The letter does not obligate you in any way. It only helps the providers to create your quotes depending on the amount of energy you used for the past year.

What is electricity with no deposit?

This type of plan allows you to sign up for a provider contract without a deposit, binding contract or credit check. If you have bad credit, a no deposit plan means you don’t have to part with hundreds of dollars before you can have electricity.

What if my electricity service is disconnected?

If you have had your electricity service disconnected, you’ll be required to pay a deposit for new electricity service. In this case, on top of the deposit, you’ll need to pay the amount due as well as the disconnection and reconnection fee. How much you’ll pay will depend on the provider, but it can often reach hundreds of dollars.

When is a deposit required?

About 50% or more of customers need a deposit. There are different reasons why electricity providers require a deposit from consumers, but the most common one is if a customer has a low or bad credit score. Other reasons include late payments, failure to pay past bills and disconnection. In some cases, electricity providers will waive the deposit if you are 65+, have proof of on-time payments on previous bills or have a letter of credit from your current electricity provider.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.