Thanks to deregulation in Dallas, Texas, residents and business owners have the ability to choose their own electric provider. While this allows you to search the market and find the best deal, it also means hours or days of research. Finding the best electricity plan for your needs is a lengthy, tedious process, especially with how different companies structure their plans.

One such option when it comes to electricity plans is prepaid electricity. While most everyone qualifies for a prepaid electricity plan, it certainly isn’t for everyone. There are pros and cons involved and it’s important to be aware of them before jumping the gun and signing up for one. Contact us at EnerGenie if you’re thinking about choosing a prepaid electricity plan and we’ll find out if it’s the best option for you.

Prepaid electricity is exactly what it sounds like and works similarly to how prepaid phone or internet plans work. Essentially, you determine at the start of each month how much electricity you think you’ll use and pay for it upfront. If you think that you will use 1,000 kilowatts of electricity, that’s the amount you pay for. If it’s the middle of summer and you intend to use your air conditioner more freely, you’ll likely opt for a higher amount such as 1,500 or 2,000 kW.

Prepaid electricity plans are month-to-month, which means that you don’t have to sign an extended contract. Each month, you decide if you want to purchase more electricity from the same provider or if you want to search for something different.

Like most parts of Texas, Dallas offers a number of prepaid electricity plans. However, they also offer a number of other electricity plans which means that you’re not stuck with only one option. Prepaid plans are great for some, but they’re not for everyone or every situation. Let’s look at some of the other types of electricity plans available for you to choose in Dallas.

Variable rates mean that your rate is subject to change from month to month based on the current market cost of electricity. Choosing this type of plan is kind of like playing the stock market in that your rate can go up or down depending on the economy.

A fixed-rate electricity plan works the same way that a fixed-rate mortgage does. The rate that you sign up for is the rate that you’ll keep until the end of your contract.

Dallas also offers a number of green energy plans. These types of plans can be either fixed or variable-rate and feature electricity that’s created using renewable resources. Wind power is the number one source of renewable energy in Dallas, but solar power is also available. The catch with green energy plans is that your specific electricity isn’t necessarily coming from a renewable resource. It merely means that your monthly fee is being paid towards developing and creating renewable energy.

Indexed electricity plans are slightly trickier than fixed or variable-rate plans and are a combination of the two. You pay a fixed rate up to a certain usage point, but your rate jumps or dips as you use more electricity. For example, you might pay 15 cents per kWh for the first 1,000 kWh, but your rate drops to 12 cents for any electricity usage beyond 1,000 kWh.

Before you can safely decide whether or not prepaid electricity is for you, let’s look at some of the downsides associated with it.

One of the advantages of prepaid electricity plans is that they don’t lock you into a contract. However, the lack of a contract sometimes means hidden fees. Hidden fees can include service fees each time you reload your contract, delivery fees, setup fees, and outage fees.

Anytime you sign up for a prepaid electricity plan, there’s a chance that you go over your limit. When this happens, your power company isn’t obligated to notify you and they even sometimes turn off your power. You can always contact them and purchase additional electricity, but power outages are a nuisance. The additional electricity also typically comes with an overage fee.

If you get tired of your prepaid electricity plan in the middle of the month, there’s a good chance that you’ll be charged a cancellation fee for stopping your plan early.