By Alam · Last checked November 2026 against the Public Utility Commission of Texas and Dominion Energy South Carolina
Prepaid electricity means you pay for power before you use it, a bit like a prepaid phone. There is no monthly bill, no credit check hurdle in the usual sense, and in some places no deposit. The trade-off is that your power can be cut off quickly if your balance runs out. This guide explains how it works, what it costs, who it suits and the rules that protect you.
This guide is independent and is not run by any utility. The clearest published rules are in Texas, so we use Texas as the main example, then look at a utility program in South Carolina.
How prepaid electricity works
- You choose a provider and pay a starting balance to connect service.
- You add money to your account whenever you like.
- Your usage is tracked and deducted from the balance, in Texas as dollars of electricity rather than a set number of kilowatt-hours.
- You get balance alerts by phone, text or email, and you can check your balance any time.
- If the balance falls too low, service is cut off until you add money again.
Prepaid vs. a regular bill
| Prepaid | Regular (postpaid) bill | |
|---|---|---|
| When you pay | Before you use power | After you use power |
| Monthly bill | None (you track a balance) | Yes |
| Deposit | Texas rules do not allow one for prepaid service | Often required with weak credit |
| Shutoff risk | Fast if the balance runs out | Usually after missed bills and notices |
| Rates | Mostly variable in Texas; the price per kWh can change | Fixed or variable, depending on the plan |
| Best for | Tight cash flow, tracking daily use, avoiding a deposit | Predictable monthly budgeting |
What it costs: Texas example
The Public Utility Commission of Texas (PUC) lists these basics for prepaid electric service:
- Connection balance: no deposit, but the provider can require a balance of up to $75 to start service. Delivery company fees may be added, so the total can be higher.
- Disconnection balance: a provider can set it at up to $10. If your balance drops to that level, service can be shut off.
- Price per kWh: varies by provider. Most prepaid products are variable-rate, so the price can change daily. Check the Electricity Facts Label for each plan.
- Fees: vary by provider. Read the Terms of Service and the Prepaid Disclosure Statement before you sign up.
- Price cap: prepaid prices cannot be higher than the maximum price of the “provider of last resort” at 500, 1,000 and 2,000 kWh, as shown on that company’s facts label.
Because the price is not fixed, a prepaid plan is not always cheaper than a regular plan. Compare the price per kWh at your usual usage before you choose.
Your rights under Texas rules
- Warning before shutoff: the provider must warn you between 1 and 7 days before your balance is expected to reach the disconnection level. If you use power faster than expected, shutoff can come as little as one day after the notice.
- No weekend shutoff: a provider cannot disconnect you for low balance on a weekend day, or when the payment methods listed in your disclosure statement are not available, or during an extreme weather emergency in your county.
- Balance on request: you can ask for your current balance and the estimated days of power left. It must be available either all the time or within two hours of your request.
- Refund: the provider must refund unused balance within ten business days after the final bill and final meter reading.
- Extreme weather help: if your balance reaches negative $50 or more during an extreme weather emergency, you can ask for a deferred payment plan within one business day after the emergency ends.
- Reconnection: pay off any negative balance and make a new connection payment. Service should be restored within two hours after the problem is fixed.
Who should not use prepaid
- Households with medical needs that depend on power: prepaid service is not available to customers designated Critical Care or Chronic Condition residential customers in Texas. If you become designated, your provider should help you switch without a transition fee.
- Anyone who may need bill assistance: the PUC warns that some assistance agencies do not offer bill payment help to prepaid customers. Check before you sign up.
- People who cannot receive alerts: providers send balance and shutoff warnings by phone or electronically, so you need a working phone number or email.
Who offers prepaid electricity
Prepaid plans are mostly sold by retail electricity providers in states with competitive electricity markets, and Texas has the most. In Texas, companies such as Direct Energy, Payless Power and Pogo Energy have published prepaid terms. Offers change often, so confirm on the provider’s site and compare plans on the state’s official comparison site, Power to Choose.
Some regulated utilities run their own prepay programs. For example, Dominion Energy South Carolina runs a PrePay pilot. Its details are below, as a contrast to the Texas model.
Example: Dominion Energy South Carolina PrePay
- Who can join: Dominion describes it as a pilot. New customers who would otherwise pay a security deposit can join, and some existing customers may be considered after a nonpayment disconnection or to avoid one. Dominion notes it may not be the cheaper option.
- Starting cost: a $100 down payment for new accounts that would need a deposit.
- How it works: each day, a meter reading sets the previous day’s cost, and that amount is deducted from your balance. Power stays on while the balance is positive.
- Alerts: low-balance emails are automatic, and text or app alerts can be turned on. Alerts go out when about five days or less remain.
- Fees: Dominion lists no reconnection fee or reconnection deposit. Paying by card through its payment vendor adds a $3.50 convenience fee per transaction.
Tips if you choose prepaid
- Add money before your balance gets low. A small cushion avoids a shutoff on a hot or cold day.
- Turn on every alert option and keep your phone number current.
- Know your average daily cost so you can estimate the days of power left.
- Read the Electricity Facts Label, Terms of Service and Prepaid Disclosure Statement before you sign.
- Keep your last statement or usage summary. In Texas you can request a summary covering up to 12 months.
If you are struggling to pay, read our guide to help paying utility bills first. You may qualify for programs that a prepaid account would not use. Our electricity bill calculator can help you estimate monthly cost, and how to pay an electric bill covers the usual ways to pay a regular bill.
Frequently asked questions
Is prepaid electricity cheaper?
Not necessarily. The price per kWh varies by provider, and most Texas prepaid plans are variable-rate. Its main benefits are control and no deposit, not a guaranteed lower price.
Can prepaid electricity be disconnected?
Yes. If your balance falls to the disconnection balance, service can be cut off. In Texas, the provider must warn you first, and cannot disconnect for low balance on weekends or during an extreme weather emergency in your county.
Do I need a deposit?
Texas rules say providers must not require a security deposit for prepaid electric service. They can require a starting balance of up to $75 instead.
What happens to my leftover balance if I move?
In Texas, the provider must refund unused balance within ten business days after the final bill and final meter reading.
Will I get a monthly bill?
Usually not. In Texas, prepaid customers track a balance instead, though you can request a summary of usage and payments. Dominion’s PrePay customers still get a monthly statement as a recap.
Sources: Public Utility Commission of Texas, “Prepaid electric service” FAQ (puc.texas.gov/consumer/facts/faq/prepaid); 16 Texas Administrative Code, Section 25.498, Prepaid Service; Dominion Energy South Carolina, “PrePay” (dominionenergy.com), all checked November 2026. Read how we write and check guides on our editorial policy page, or contact us with corrections.