Cheap Electricity Rates and No Deposit
Updated: Apr 16, 2020
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No deposit electricity service for all. First, I want to tell you why to get a new energy service you do not need to pay a deposit. Then, I will make a comparison with what will happen if you pay a deposit.
No deposit electricity service, we need energy in our homes.
Nowadays, electricity is a necessity. Can you imagine our lives without power? No cellphones, no computers, tablets, TVs, refrigerators, washing and drying machines, etc. We would go crazy. It is not that we cannot live without appliances and electronics, however, our fast-paced life obligates us to use all those electronics to catch up with all we need to do.
As food and other energy supplies, like gasoline, are available to anyone, however, we need to pay for that before using it. Why electricity should be any different? We gas our cars to go to work or school, don’t we? We prepay for the gas when we fill up our car’s tanks. It is my belief that electricity should not be any different.
Do not borrow the power from anyone, buy your own power. This is correct, you can buy your own electricity to power your home. Buy as many kilowatts as you want, or you think you may need for the period you want. Calculate how much electricity you will need for, let us say, next 30 days and you will see that with prepaid electricity service the same power you calculated will last at least 3-7 days more.
Comparing to the gas tank in your car. Every time you get in your car and start the engine, one of the first things you do is to look at the gas gage, right? If you know that you are running low, you try to drive in a way that will save you as much gas as you can in order to get to a gas station or at least to your next destination. Either way, we are always watching at that gas gage trying to conserve fuel with the intention to last as far as possible.
When you prepay your electricity there is no need to pay a deposit.
Energy companies charge a deposit for new electricity service.
With the traditional electricity service plans, the electricity will be sent to you and then the energy company will charge for all the kilowatts you used. Since you do not know how your daily usage is, it is hard to see if you are using a lot of energy or not. At the end of the month, you will get an invoice with your usage and that usage multiplied for the rate you choose when you started the energy service.
Energy companies, especially the big ones, would like you to spend as much electricity as you can. In the traditional billing method, one statement a month, you do not know how much energy you are using per day. They want you to use as much as you can, and at the end of the month, you will get a huge energy bill.
Since you are borrowing the energy from them, and they do not know if you are a trustworthy customer, they will perform a credit check. For a credit check, the energy company will require your social security number.
The main reason for this is because a house can run electricity for 45-50 days without a payment. This can represent $400 - $500 or more. And then if the customer does not pay, well the energy company will lose big time.
So, in the case that the credit score is less than perfect, the energy company will ask for a deposit. These security deposits may run from $200 to $500; I have seen cities charging over $800 to start an electricity service. In the case that the customer leaves the energy company without payment of the monthly statement, the energy company will use the deposit for operation cost and collection expenses. Normally, the electricity not paid goes as debt or loss to the company. Believe me that there are a lot of customers that are just jumping from one energy company to another to another.
Comparing services paying a deposit and prepaid.
Allow me to explain to you the image above. I made this for a 6-month usage, whereas an average we spend 1000 kWh of electricity per month. The rate for a postpaid or traditional energy service averages 10 cents per kilowatt-hour, and for prepaid electricity service the rate average 12 cents per kilowatt-hour. We multiply that for the usage, which is 6,000 kilowatts. Then we will add the deposit, where now is about $400. As you can see, even if you think you will save because the energy rate is lower with postpaid electricity service, at the end of 6 months it still more expensive. I did the same for 12 months and still prepaid wins for more than $150.
Daily usage notifications with prepaid electricity.
One more thing I would like to emphasize, the daily usage notifications are key for energy usage savings. Prepaid electricity sends you daily notifications via text or email. This will tell you if your efforts of saving energy are working or not. Contrary to the traditional electricity service that only sends you a statement once a month. Why, because they want you to use more energy, not to be careful about how you use the electricity at home so they can charge you more.
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