Prepaid Electricity as Business

Prepaid Electricity in Texas – Booming or Falling Business

It is often mind boggling why Texas, a state in the USA that is known for cowboys, rustic environment and native accents, is also known for a high-end technology called prepaid electricity.

Flipping through history books, one can find that Texas is one of the few states that have been discovered to have rich oil reserves that made the state boom in the earlier days.  Looking into the present, the state is acknowledged as one of the most populous state throughout the country.  So what does this two have to do with prepaid electricity? Simple, oil reserves means power, which can generate electricity and having a lot of people means having a lot of consumers for this power source.

As mentioned, due to its rich power resource, Texas had been a haven for electrical companies.  Then came the deregulation law of electric companies that was implemented in 2002, which promoted cheaper electricity for its residents and increased proliferation of a number of companies that distributes this power source.

So how can a power distribution company compete with more than a dozen companies having the same product? For many privately-run electric companies, creativity and cheaper products is the key.  This made way to the rise of prepaid electricity in Texas.

There are several booming prepaid companies in Texas, many of which offer hassle-free, no deposit, and cost-effective services to its consumers.  Among the famous companies are dPI Energy and Freedom Powers that promises the lowest energy rate for its customers.  There is also the Electricity Texas, which tends to focus its advertisement to those who have big credits using postpaid electricity.  There are many other companies that offer practically the same service, but with a lower fixed rate or offering a much smarter electric meter.

But are these services offered really advantageous for its consumers?  Do the low rates, discounts, and no contract policies benefit the power distributor company?  Are these questions answered with a big “Yes”, that would prove that prepaid electricity is a booming business in Texas?

For the power distributor companies, there is the issue of energy consumption and inflation rate.  Energy being extracted from its original source is often expensive and is not for sale in a fixed price.  It usually goes up or sometimes goes down, but when it does goes up, the fixed rate paid by the customers may not be enough to pay for the expenses of the companies. Then there is the problem of abrupt disconnection, which some prepaid consumers complained about.

Although the positive side may seem to outweigh the negative side of prepaid electricity for the companies and its consumers in Texas, but does it provide big safety net for both sides and be considered a booming business for its power distributors?