No-deposit electricity means signing up for electricity service in Texas without paying an upfront security deposit (typically $150–$400 on standard plans). To qualify for no-deposit electricity, you need one of the following:
- A "Letter of Credit" from your previous electricity provider showing 12+ months of on-time payments
- A credit score above ~670 (varies by provider; some require 670+, others accept 600+)
- A prepaid electricity plan — no credit check at all because you pay in advance
- Proof of certain qualifying conditions — over 65 years old, a documented victim of family violence, or medically indigent (these are PUCT-protected categories that REPs must accept). Some REPs also voluntarily waive deposits for active-duty military.
- A co-signer with established credit who guarantees your account
If none of these apply, prepaid electricity is your fastest path to service without a deposit — most plans activate the same day, require no credit check, and have no contract. The tradeoff: prepaid rates are typically 15–60% higher per kWh than competitive fixed-rate plans.
Want to find no-deposit plans available at your address right now? Upload a bill (or just enter your ZIP) and we'll filter to plans that don't require a deposit. Free, no signup.
What "no deposit" actually means in Texas
When you sign up for electricity in Texas, the retail provider (REP) checks your credit history. If you don't have an established Texas credit history with utilities — or if your history shows late payments, defaults, or disconnections — most REPs will require a security deposit before activating service.
A typical security deposit in Texas runs $150–$400, often equal to one or two months of estimated bills. You get it back when you close the account in good standing (typically after 12 months of on-time payments), but in the meantime it's cash out of your pocket.
"No-deposit electricity" plans skip this requirement entirely. They come in three flavors:
- Standard postpaid plans with a deposit waiver — same plan, no deposit, if you qualify
- Prepaid plans — no deposit, no credit check, but you pay in advance
- PUCT-protected exemptions — certain customer categories that providers cannot require deposits from
How to qualify for no-deposit standard plans
The first path is the cheapest if you can qualify — you get the same competitive rates as everyone else, just without paying the deposit upfront.
Option 1: Letter of Credit (or "Letter of Recommendation")
This is the most common path. If you've had electricity service in Texas (or sometimes another state) for 12+ months with on-time payments, your old provider will write a Letter of Credit confirming that.
How to get one:
- Call your current provider and ask for "a Letter of Credit" or "a letter of payment history"
- They typically email it within 1-3 business days
- Forward it to your new provider when you sign up
Important caveats:
- Some REPs only accept Letters of Credit from providers within Texas
- Most require the letter to be less than 90 days old
- It must show 0 or 1 late payments in the 12 months covered (some REPs allow 2)
Option 2: Credit check passes
Many REPs use a soft credit check that doesn't affect your credit score. The score threshold varies:
| Provider type | Typical credit threshold | Deposit waiver if you pass |
|---|---|---|
| Tier-1 REPs (TXU, Reliant, Direct Energy, Gexa) | 670+ | Full waiver |
| Mid-tier REPs | 600+ | Often full waiver |
| Smaller/newer REPs | Often lower thresholds | May still require partial deposit |
If you've never had Texas electricity service but have a U.S. credit score above ~670, you'll usually pass.
Option 3: PUCT-protected categories (cannot be charged a deposit)
By Texas regulation (PUC §25.478), REPs cannot require a deposit from these customer categories:
- Customers 65+ years old (with valid ID showing date of birth, and not currently delinquent on any electric account)
- Documented victims of family violence (with a certification letter from the Texas Council on Family Violence)
- Medically indigent customers (household income at or below 150% of federal poverty guidelines with qualifying medical conditions)
Some REPs also voluntarily waive deposits for active-duty military members, though this is not a PUCT regulatory requirement. Ask the provider directly.
If you qualify under any of these, tell the REP when you sign up. You may need to provide documentation (ID, court protection order, medical certification, etc.).
Option 4: Co-signer
If your own credit doesn't qualify, you can add a co-signer with established credit. The co-signer is jointly liable for the account — if you don't pay, the REP can collect from them. This is rare in practice (most people use prepaid instead) but it's a legitimate option.
The prepaid electricity alternative
If you can't qualify for a no-deposit standard plan, prepaid electricity is the most common workaround. Key features:
- No credit check. Anyone can sign up.
- No deposit. You add money to your account in advance and use electricity until the balance runs out.
- Same-day or next-day activation. Much faster than standard plans.
- No contract (in most cases). You can leave anytime without early termination fees.
The tradeoff: prepaid plans charge significantly higher per-kWh rates than the cheapest fixed-rate plans available to customers with good credit. Typical premium: 15–60% higher per kWh for prepaid vs. the cheapest fixed plan for the same usage profile.
Who prepaid makes sense for:
- Customers who can't qualify for standard plans
- Customers who want budget control (you literally can't overspend)
- Renters or short-term residents who don't want to deal with deposits and refunds
- Customers building or rebuilding credit (some prepaid providers report on-time payments to credit bureaus — check with the REP directly before signing up)
Who prepaid is wrong for:
- Anyone who could qualify for a standard plan instead — the rate premium isn't worth it
- High-usage households (the rate premium compounds quickly above 1,500 kWh/month)
For the deeper dive on prepaid specifically, see our Prepaid Electricity in Texas guide.
Finding no-deposit plans in Texas
The Texas market has dozens of active REPs offering no-deposit options. The "best" one depends on your usage, your qualification path, and your TDU (the utility that owns the poles and wires in your area).
Rather than listing specific providers (rates change weekly), here's how to find the right plan:
- Upload your bill or enter your ZIP on Power My Casa — we'll show you plans available at your address, filtered by whether they require a deposit.
- Compare the effective rate at your actual usage level (not just the advertised rate at 1,000 kWh).
- Check the plan type: standard postpaid (cheaper, requires credit) vs. prepaid (more expensive, no credit check).
Don't trust "lowest advertised rate" alone. Many no-deposit plans use bill-credit structures that make the advertised rate misleading. See The Bill Credit Trap for why.
What to watch for in no-deposit plans
A few common patterns that drive overpayment in the no-deposit segment specifically:
- High monthly base charges — some "no deposit" plans recoup the lost deposit revenue with a $10–$15 monthly base charge regardless of usage. Always check the base charge in the EFL.
- Short-term promo rates — a "no deposit, low rate" plan that advertises 9.9¢/kWh might be 9.9¢ for the first 3 months only, then jump to 18–20¢ for the remaining term. Read the contract length and rate structure carefully.
- Steep early termination fees — some no-deposit plans have ETFs of $150–$300 to compensate the REP for the risk. If you might move, factor this in.
- Slamming risk — historically, the no-deposit segment has had more reports of unauthorized provider switching ("slamming"). Stick with established REPs even at slightly higher rates.
How to sign up for no-deposit electricity in Texas
The process is the same as signing up for any electricity in Texas — you just specify "no deposit" or qualify under one of the paths above:
- Compare plans — use Power My Casa or the PUCT's Power To Choose site to find available no-deposit plans in your TDU
- Have these documents ready:
- Government-issued ID
- Social Security Number (used for credit check OR exemption verification)
- Your service address (the REP will look up your ESI ID from the address)
- Letter of Credit if you have one
- Documentation of any PUCT-protected category if applicable
- Apply with the REP — either online or by phone. The credit check or qualification verification happens in real time for most providers.
- Service starts — typically 1-3 business days for standard plans; same-day for prepaid.
Frequently asked questions
Q: Will I get my deposit back if I'm required to pay one now?
A: Yes — Texas REPs are required to refund deposits (with interest, currently at 4.12% for 2026) after 12 consecutive months of on-time payments. Some refund automatically; with others you have to request it. Mark your calendar 12 months from signup.
Q: Does a Letter of Credit from out-of-state work?
A: Sometimes. Texas REPs are required to consider out-of-state Letters of Credit but aren't required to accept them. In practice, providers from major utility markets (New York, California, Florida) are accepted more often than smaller markets. Ask the REP before applying.
Q: I have bad credit. Is prepaid my only option?
A: Not necessarily. Some REPs offer partial deposit options (you pay $100 upfront instead of $300), or deposit financing (split the deposit across your first 2-3 bills). Ask each REP directly.
Q: How long does it take to get electricity turned on with no-deposit prepaid?
A: Same day in most cases, if you complete signup before 3:00 PM and the meter is already at your address. If a technician needs to install a smart meter, it can take 1-3 business days.
Q: Are no-deposit plans more expensive?
A: Standard no-deposit plans (deposit waived because you qualify) cost the same as the regular plan. Prepaid no-deposit plans are typically 15–60% more expensive per kWh than equivalent fixed plans. So the answer depends on which path you take.
Q: What if I'm denied for no-deposit?
A: You have three options: (1) pay the deposit (refundable in 12 months), (2) sign up for prepaid instead, (3) add a co-signer. If you think you were denied incorrectly under a PUCT-protected category, you can file a complaint at puc.texas.gov.
Q: Does no-deposit electricity work for an apartment?
A: Yes — exactly the same process. You'll need your ESI ID for the specific apartment address, which is usually on the utility-information sheet your apartment provides at move-in.
Last reviewed May 17, 2026. PUCT rules on deposits and protected categories change occasionally — verify current rules at puc.texas.gov before relying on the specific dollar amounts or thresholds above.