Are you ready to save hundreds on your electricity bill?

Are you hunched over the computer on a beautiful day because you’re researching prepaid electricity plans? The warm weather outside is both tempting and a reminder that keeping your home at an ideal temperature has gotten expensive.

In Houston, you can choose your own electric plan, which is both a blessing and a curse. The thought of having to research all the different options can immediately fill your mind with dread when you could be out walking, playing frisbee, cleaning up your yard, or doing anything else that’s more fun than comparing electricity rates.

Don’t want to fill multiple days with spreadsheets, calculators, and articles just like this one? We don’t want that for you either!

That’s why you should use Power Wizard.

Power Wizard is here to help save you time, money, and hassle by doing the research for you. Over 130 different providers are in our database and our unbiased AI compares them all in seconds! 

Ditch the spreadsheet and find your answer instantly instead of wasting days or weeks’ worth of time on research.

Power Wizard’s Shopping Tool Can Reclaim Your Time!

We’ve put together a whole guide for you below if you want to figure out how to do it on your own. But save yourself the energy and find the answer instantly using our powerful Shopping Tool!

 

What Does a “Prepaid Electricity Plan” Mean?

A prepaid electricity plan allows customers to make electric service purchases in advance.

Prepaid electricity service means you purchase electricity before you use it.

With prepaid service, a Retail Electric Provider (REP) allows you to pay upfront to manage your payments and electricity usage.

Service is provided on a “pay-as-you-go” basis, with usage calculated daily.

How Does it Work?

Prepaid service is very different from the standard electricity service that you are used to having for your household.

With standard electricity service, you receive a monthly bill to pay for the amount of electricity you have used over the previous month.

As a prepaid customer, you will not receive a bill.

Instead, you will pay in advance to open an account with your REP.

As you and your family use electricity, your REP will deduct what you owe from your account.

You are tasked with monitoring and replenishing your account to make sure the money in your account does not run out as electricity is used.

This can be a time-consuming task.

A benefit to becoming a Power Wizard member is that we never stop working for you.

Power Wizard monitors your usage for you and will make adjustments as needed.

Does Every REP in Houston Offer Prepaid Plans?

Prepaid electricity was made possible through the modernization of metering technology.

This includes the replacement of older analog meters with digital meters, which we call, “smart meters.”

The introduction of “smart meters” to Houston, TX is part of an ongoing national “smart grid” movement that seeks to integrate modern technology into the existing electric power grid to improve its reliability, quality, and efficiency.

A huge part of this means developing components of the electric grid that are able to communicate wirelessly to the utility and/or to you, the customer.

Depending on a utility’s level of technological advancement, upgraded meters or “smart meters,” can wirelessly transmit electronic meter readings to a utility.

This eliminates the need for on-site reading.

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They may also have remote disconnection and reconnection capabilities.

Most utilities around the country have upgraded to digital meters over the last two decades, but not all.

This means that there is a possibility that not every REP in Houston will offer a prepaid electricity plan option.

Is Prepaid The Same As “Pay As You Go?”

Prepaid electricity service in Houston means you purchase your electricity prior to using it.

Pay-as-you-go service is just another name for the same prepaid electricity service.

Your REP may use the names interchangeably, but you are still paying before electrical services can be used.

Is a Prepaid Plan the Best For Me?

There are several things to consider before you choose a prepaid electricity plan:

• To continue your electric service, you must continue to make your payments on time.
• If your prepaid balance falls below an agreed-upon amount, your service could be disconnected without warning.
• Your REP must be able to notify you through text or email services.
• You will not receive a monthly bill.

There are also several questions you must ask yourself to determine if a prepaid electricity plan is best for you:

• Do you prefer to pay as you go?
• Are you okay paying the market rate for electricity (which could be 2x or 3x higher than a fixed-rate plan’s rate)?
• Do you prefer not to pay a deposit?
• Are you ok with not receiving a monthly paper bill?
• Do you want to reduce and monitor your energy usage?

Benefits of Prepaid Electricity Plans in Texas

Following the onset of deregulation in Houston, Texas, most REPs have decided to offer a variety of flexible rate options for electricity service.

When you choose a prepaid electricity plan, you are only paying for the electricity that you want.

Prepaid plans can help you avoid long-term contracts and outrageous deposits, and save money over time.

Another advantage of choosing a prepaid electricity plan is that it can help you monitor your energy use and account balances.

If you are a family that works from a monthly budget, then a prepaid plan may be just right for you.

You can purchase a prepaid plan with a very small amount of money.

They typically don’t require a deposit, contract, or credit check.

Don’t Get an Outrageous Energy Bill in the Summer

Texas summers are known to be long and hot.

It’s no surprise that without a fixed-rate electricity plan or prepaid electricity plan, your rates could spike during the summer due to increased usage.

You can avoid those spikes when you choose a prepaid plan.

With a prepaid plan, you can monitor your usage.

You can determine if you should cut back on the consumption of energy in your home or if you may need to add more money to your account because the increased usage is unavoidable.

But, there’s a problem:

Many prepaid plans are based on the market price of electricity. In the summertime in Houston, that rate can be quite high. With a prepaid plan, you might exceed your usage halfway through the month, either leaving you without electricity for weeks or leaving you with a huge bill

Track Your Electricity Usage

Prepaid electricity plans can provide you with a notification regarding your energy usage as well as your account balance.

This will help you to understand how much energy you are using in your home.

Your “smart meter” can optimize your energy usage in intervals. It can let you know when you are using more energy, and how you can reduce your usage.

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They will even notify you when your balance is low and is close to reaching disconnection levels.

If you happen to miss one of these notifications and your balance falls below their minimum requirement, then you might get hit with a hefty fee.

No Long Term Contracts

Prepaid electricity plans do not require a long-term contract.

Deregulation of the Texas energy market has made it possible for customers, like you, to choose your REP or energy provider.

You now have the freedom to choose a provider who offers a plan that works best for you and your family.

When you choose a prepaid plan, the freedom that you have grows exponentially. You are no longer tied to a specific provider for an extended amount of time.

If you become unhappy with your current energy provider, you can enjoy the freedom to change providers whenever you want.

Without having to sign a contract, you are also able to switch electricity plans if you feel like your current plan is not meeting your needs.

You need to be careful, though:

Just because there’s not a contract doesn’t automatically mean it’s the right plan for you.

Problems with Prepaid Electricity Plans in Texas

Every rainbow doesn’t end with a pot of gold.

It may seem like a prepaid electricity plan is the obvious way to go for anyone looking to save on their monthly electricity bill.

However, where there are pros, there are also cons.

You must consider the fact that there could be hidden fees associated with your payment, even though it’s made in advance of services being rendered.

You must also consider the cost of cancellations.

Cancellations could potentially occur more frequently with a prepaid plan, especially if you are not used to monitoring your usage, and your balance falls below the disconnect threshold.

Hidden Fees

Some REPs in Houston charge fees that can add substantially to the cost of prepaid electricity service:

• Disconnect/reconnect fees
• Payment processing fees
• Insufficient Funds fees
• Summary of Usage fees

Disconnect and reconnect fees can range from $15 to $75 per occurrence.

There is no limit to the number of times you can be disconnected within a given month if you run out of funds in your account.

Using a method other than a debit or credit card could result in a payment processing fee. Those fees can range from $3 to $5 per transaction.

When choosing a prepaid electricity plan in Houston, it’s important to note what fees your prepaid payment includes.

Cancellation Costs

With this type of plan, you should always keep your account balance at or above the disconnection amount, or your service may be canceled.

A Retail Electric Provider (REP) can set a disconnection balance of up to $10, so it is important that you are aware of this minimum balance and make prepayments to avoid cancellation.

You will be notified one to seven days before your account balance is expected to fall below your disconnection balance.

If your account balance falls below your disconnection balance more quickly than expected, service may be canceled in as little as one day after you receive the low balance notification.

Length of Commitment

With the deregulation of the Houston electricity market, you now have the opportunity to shop around for your electricity service provider, or REP.

There are now hundreds of REPs and thousands of plans to choose from.

This is a benefit to you, considering the fact that you can now find a provider and plan that works best for you.

If you choose a plan other than a prepaid plan, you could be subjected to contract terms that range from month-to-month, or up to 36 months.

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There are many different options for term lengths in the Houston energy market.

Different term lengths often have different pricing.

If you are able to be more flexible with the length of your contract, you could get a more competitive rate.

With a prepaid service plan, there is no long-term contract to sign.

You are not obligated to remain on this plan or with this provider for an extended amount of time, but this could also mean that the rates are higher in some areas.

The “Best” Plan Will be Different for Each Family

The best plan in Houston will be different for you than your neighbor. There are several factors that you need to consider when deciding which electricity plan best meets your needs and the needs of your family.

• Cancellation fees
• Bonuses for sign up
• Different rates for renewable energy
• Minimum usage fees
• Home size
• Home age
• Zip code
• Historical energy per month

Other Different Types of Electricity Plans in Houston

There are a variety of plans to choose from in Houston. The most popular types of plans, other than prepaid plans are; fixed-rate plans, variable-rate plans, and indexed rate plans.

Fixed-rate plans just mean that your electricity payment will be set at a fixed rate for a fixed amount of time.

Variable-rate plans mean that you will not have a contract, and rates can vary and be determined by your REP.

An indexed rate plan means that the rate your REP charges can vary based on a pricing formula tied to a public index.

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Fixed-Rate Electricity Plans

If you choose a plan in Houston with a fixed rate, your price per kWh will not change during your contract period.

This may help you if you are a household that lives on a budget.

If however, market prices fall, you may have to wait until your contract ends to enjoy a lower price.

Variable-Rate Electricity Plans

Variable-rate plans in Houston have no monthly contract or cancellation fee, but the rate you pay per kilowatt-hour (kWh) can vary from month to month.

Your rate can go up or down based on the market and the discretion of your REP.

Variable plans allow you to benefit from falling market prices.

They also have an increased risk for higher rates if electricity prices spike due to natural disasters, changes in weather, or adverse market conditions.

Indexed Electricity Plans

An indexed or market-rate plan in Houston is very similar to a variable plan.

The price per kWh can go up or down each month.

The difference is that the rates for these plans are directly tied to a pricing formula connected to a public index.

If the index rises, your monthly rate will too.

If the index falls, your rates will be lower.

Power Wizard takes the guesswork out of choosing an electricity plan.

With Power Wizard, the burden doesn’t fall on you to pick your plan.

We compare costs between all 3 types of plans and match your electricity needs to the plan that benefits you best.

We also continue to monitor the market so if your rate should change and indicate a drop in pricing, then we will switch your electrical company to the most cost-effective option.

You don’t have to do a thing.

Use our Shopping Tool to learn just how much money you can save each month.

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Cheapest Electric Company in Houston with Prepaid Plans

With the number of electricity companies in Houston competing for your business, it literally could take you months to go from site to site comparing companies, plans, and rates.

Keep in mind that the cheapest electric company in Houston, may not be the best one for you.

Electricity Rates Houston

Deregulation has made it so that retail energy providers or REPs can now create a competitive electricity marketplace in Houston. Prepaid electricity rates in Houston are likely different than rates in other deregulated cities in Texas.

Since 2002, approximately 85% of customers, like you, have switched REPs at least once.

Power Wizard’s magic can save you time and keep you from having to track electricity market fluctuations.

Power Wizard tracks those changes for you and makes adjustments as needed.

How Do Companies Even Set Electricity Rates?

Electricity companies set your rates in Houston by looking at the following criteria:

• Supply and demand
• Seasonality
• Transmission and distribution
• Purchasing Processes

How Do You Get the Best Electricity Rates in Houston?

The best electricity rate in Houston may not be the best rate for you.

The cheapest electricity plan in Houston may not be the plan that fits the needs of you or your family.

There are an extensive amount of factors that go into choosing the electricity plan and rate that works best for you.

There are a couple of different ways that you can compare electricity rates in Houston.

Price it Out By Going to Each Companies’ Website

The non-Power Wizard way looks a little something like this:

1. Gather the specifics about your home such as size, energy needs, and zip code.
2. Go online to compare all the available plans side by side. Keep in mind that some companies offer promotions, and some have hidden fees so it might feel like comparing apples to bananas.
3. Know about market values (who has time for that), to decide if you should have a fixed or variable rate.
4. Become an expert in data analysis in order to analyze electrical rates and usage data for several years and be able to spot trends in the market to save you money.

You are thinking that this method of finding a prepaid electricity plan in Houston, just doesn’t seem practical.

Fortunately, when you become a Power Wizard member, you’ll find that we do all the heavy lifting on this one.

Save Tons of Time by Using Power Wizard

You will begin by using Power Wizard’s Shopping Tool.

You input your personal information into the magical tool that allows Power Wizard’s algorithm to become more familiar with you and assess your specific needs based on factors like:

• Zip Code
• Home’s size in square footage
• Home’s age (to determine energy efficiency)
• Historical energy usage (you can even submit your previous electricity bills)
• And more

Power Wizard’s unbiased algorithm then looks through EVERY available plan in your zip code to determine which plan is best for you and your usage.

Power Wizard makes it easy to sign up or switch electricity plans in Houston.

It’s a no-brainer.

 Power Wizard
20455 State Highway 249, Suite 200, Houston, TX 77070, Houston, TX, 77070
(713) 322-8533