What is prepaid electricity?

Prepaid electricity—often called pay‑as‑you‑go—lets you pay for power in advance and then deducts your usage from your balance each day. Texas rules require providers to use smart‑meter data and a customer prepayment device/system (CPDS) that supports balance updates and remote reconnection after you pay.

Official consumer guidance: see the state’s Prepaid Electric Service Utili‑Facts and the full rule at 16 TAC §25.498.

How prepaid works (Texas specifics)

• Add funds via app, website, phone, or participating cash locations. You may need a small connection balance to start or reconnect (Texas caps this at $75 for residential customers).
• Use & track—your smart meter sends usage to your provider, which deducts from your balance daily and shows your estimated days or dollars remaining.
• Alerts before shut‑off—by rule, providers must send timely low‑balance notifications (text/email/app). Each provider sets its alert levels, but Texas caps the disconnection balance at $10 for residential customers.
• Reconnect fast—after you pay enough to reach your connection balance, your provider must request reconnection promptly (often remote).

Protections you should know

• $75 / $10 limits: The connection balance for residential prepaid cannot exceed $75; the disconnection balance cannot exceed $10 (see §25.498).
• Extreme weather & timing: Disconnections for falling below your balance are prohibited during an extreme‑weather emergency, on weekends, or when payment methods listed in your Prepaid Disclosure Statement (PDS) are unavailable.
• Critical Care customers: Prepaid service is not allowed for Critical Care Residential or Chronic Condition Residential Customers. If you’re later designated as such, the provider must move you to postpaid without fees.
• Deferred payment plans: If you owe a deferred amount, rules restrict disconnection and require notices. Always read your PDS for details.

Costs & fees to review before you enroll

Prepaid plans can be transparent and budget‑friendly if you monitor your balance—but fees vary. In addition to the energy price (¢/kWh), check for:

• Daily/base charges
• Third‑party reload/payment fees
• Reconnection fees if you let your balance drop below the disconnection threshold
• TDU delivery charges (these apply to all plans in Texas)
• Any other miscellaneous fees (paper billing, printed notices, etc.)

Read both the Electricity Facts Label (EFL) and the Prepaid Disclosure Statement (PDS). The PDS summarizes how alerts work, when disconnection can occur, and how to reconnect.

Is prepaid right for me?

Texas grid context (ERCOT & demand)

Most Texans are served by the ERCOT power grid, which covers about 90% of the state’s electric load. Peak demand and weather can change prices day‑to‑day, so prepaid customers should watch usage and alerts closely during heat waves and freezes.

For background on Texas electricity, see the EIA Texas profile.

If you need bill help

Texas offers income‑qualified assistance through local agencies as part of the Comprehensive Energy Assistance Program (CEAP). Start at the state’s “Help for Texans” portal to find assistance in your area.

• Help for Texans (TDHCA)

Outages & your delivery company

In Texas, transmission & delivery utilities (TDUs) maintain the lines and restore outages. For outage tips and contact info for the major TDUs, use our guide:

Oncor, CenterPoint, AEP Texas, TNMP, and LP&L outage resources

Checklist before you enroll

1. Read the EFL and PDS completely (rate, fees, alert rules, reconnection steps).
2. Turn on text/email/app alerts at multiple thresholds (e.g., $25 and $15).
3. Plan your recharge method (card, ACH, or cash) and keep it handy.
4. Know your disconnection and connection balances ($10 and $75 caps for residential).
5. Save emergency numbers and download your TDU’s outage app.