Updated: October 11, 2025
Texas Electricity Deposits: A Clear, Customer-Friendly Guide
Moving into a new place or switching plans and suddenly asked to pay an electricity deposit? You’re not alone. In Texas, Retail Electric Providers (REPs) sometimes require a refundable deposit as a security measure. The process is governed by both PUCT Rule §25.478 (Credit Requirements & Deposits) and Texas Utilities Code, Chapter 183 (Customer Deposits). Below, we break down why deposits are requested, typical amounts, who qualifies for a waiver, how interest is paid, and smart ways to avoid paying one in the first place.
- Why deposits exist: They protect providers if bills go unpaid.
- How much: Often capped at up to one-fifth of estimated annual billing or about two months of estimated charges (see PUCT §25.478).
- Waivers: Seniors 65+, survivors of family violence, and customers with a recent record of excellent payment history may qualify (details in PUCT §25.478).
- Interest & refunds: Deposits earn interest set annually by the PUCT and are typically refunded after 12 consecutive on-time payments—see the PUCT interest rate history and Texas Utilities Code, Ch. 183.
Why do REPs require deposits?
Unlike many purchases, you use electricity first and pay later. A deposit is simply a last-resort backstop for unpaid balances. REPs also look at things like identity verification and previous utility payment history when deciding if a deposit is needed. Most run a soft credit check during enrollment to help assess risk—soft checks don’t affect your credit score (the deposit framework is outlined in PUCT §25.478).
When is a deposit commonly required?
- No or limited utility payment history (brand-new accounts).
- Missed/late payments in the recent past.
- Outstanding balances with a prior provider.
- Identity issues (e.g., freezes/fraud alerts or mismatched info during enrollment).
- Occasionally high expected usage for a premise.
How much can the deposit be?
In Texas, the rules allow deposits up to 20% of your estimated annual bill or the sum of your first two estimated monthly bills. This cap and calculation approach come from PUCT §25.478. For many residential accounts, that often translates to a ballpark of roughly $50–$500 depending on plan length, home size, and payment history.
Who doesn’t have to pay? Deposit waiver options
REPs must consider waivers for customers who can document one of the following (criteria and documentation are described in PUCT §25.478):
| Waiver Type | What You’ll Typically Need |
|---|---|
| Age 65+ | Valid ID showing age and no overdue electric payments. |
| Victim of family violence | Signed certification letter from the Texas Council on Family Violence. |
| Excellent utility payment history | Letter from your current/previous provider showing no more than one late payment within the last 12 months. |
Do deposits earn interest? When do I get it back?
Yes. In Texas, customer deposits earn interest and are refundable per PUCT rules and state law. Providers generally refund the full amount with interest after 12 consecutive on-time payments or apply it to your final bill at move-out. For the official interest rate used each year, see the PUCT Interest Rate History for Customer Deposits (PDF). The policy framework for deposits and interest is laid out in PUCT §25.478 and the Texas Utilities Code, Chapter 183.
How to avoid an electricity deposit
- Keep payments on time. Consider enabling AutoPay and account alerts.
- Have your information ready. A complete, accurate enrollment (full legal name, SSN, date of birth) avoids identity-verification hiccups.
- Ask about waiver eligibility if you’re 65+, have an excellent recent payment record, or meet family-violence criteria (see PUCT §25.478).
- Compare plans. “No-deposit” or prepaid options exist, but they often carry higher per-kWh costs—compare the total cost before you decide.
FAQ
Will a soft credit check hurt my score? No—REPs typically use soft inquiries during enrollment, which do not impact your credit score (general credit/deposit guidance is in PUCT §25.478).
If I’m asked for a deposit, does that mean I have bad credit? Not necessarily. Deposit requests can be triggered by a lack of utility history, prior delinquencies, identity-verification issues, and other operational factors—not just a credit score.
How do refunds work at move-out? Your deposit is applied to any outstanding final charges, and any remainder (plus interest) is refunded to you per PUCT §25.478 and Texas Utilities Code Chapter 183.
This page is a plain-English summary for consumers. For official rules and statutes, refer to PUCT §25.478, the Texas Utilities Code, Chapter 183, and the current/historical deposit interest rates at PUCT Interest Rate History.