How Much is an Electricity Deposit for an Apartment?

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Have you finally signed the lease on your new apartment after months of searching? Don’t put your budget calculator away just yet. It’s time to consider all of the basic living necessities that you’ll need every month – after all, air conditioning doesn’t pay for itself. Read on to learn about how much an electricity deposit is for an apartment and why you need to pay one in the first place.

Why Do Utility Companies Request Electricity Deposits?

Utility companies typically require energy deposits from their customers to protect themselves from customers potentially defaulting on their monthly utility bills. In most fixed rate energy plans, customers use electric service for a set period of time before having to pay their electric bill. Customers who have a poor history of paying their bills on time or do not have good credit are high-risk candidates for defaulting on these payments or ending service without paying. Utility deposits are meant to cover the amount an electric provider may need if a customer does not pay for service. These deposits are often required for first-time apartment renters since they have no recorded payment history.

Average Cost of an Electricity Deposit in Texas

The Public Utility Commission of Texas (PUCT) caps electricity deposits at one-sixth of your annual electric bill, which typically amounts to two months of service. It is important to note, though, that this cost will vary across providers and customers and can be determined based on your credit score and payment history. 

You can pay this deposit upfront in its entirety or in monthly installments which will be added to each month’s utility bill until the deposit balance is paid in full. However, if you are ever late to pay an installment, you will likely have to immediately pay the entire deposit in full. Utility deposits may be paid by phone, at local energy provider offices, and authorized payment locations.

How to Calculate Your Electricity Deposit Amount

Most electricity deposits amount to about two months of service, or one-sixth of your annual electric bill. The exact amount depends on a few factors that vary between the individual and the electricity provider, such as:

• Credit Score
• Previous Payment History
• Kilowatt-Hour (kWh) Usage
• Appliances Used
• Area of Service
• Time of Year
• Provider Policies

By understanding your kWh usage as well as local and provider prices, you can use a free online calculator (like this one) to determine your monthly utility bill. Multiply the end result x2, and you have a rough estimate of what you’ll be paying for your electricity deposit.

Getting Your Electricity Deposit Refunded

In order to get your utility deposit back, you must be able to make on-time payments for 12 consecutive months. To note, your deposit will be accruing interest throughout your first year of electric service at a rate established by the PUCT. 

If you are unable to make on-time payments throughout the year or do not pay your bill in full, then your deposit will be applied towards paying this balance. In the case that you move to a new apartment and switch electric providers, your deposit plus interest will be applied to your final bill and you will receive a refund check in the mail for the difference within 45 days. However, if you continue service with your previous utility company at your new home, then your deposit will seamlessly transfer to this new location or account.

How to Avoid Paying an Electricity Deposit

Generally speaking, you cannot have your required electricity deposits waived, though your local utility company may choose to waive it under certain circumstances. If you are a senior citizen, have proof of medical indigence, or are a victim of domestic violence, then your utility company may choose to waive your deposit. Additionally, if you have or a well-qualified co-signer has a positive history of paying utility bills on time and has good credit, then you may qualify for a waived deposit.

Prepaid Energy Plans: A No-Deposit Option

Is paying a utility deposit up front creating a huge barrier to entry to getting the energy you need for your apartment? Check out Payless Power’s prepaid energy plans that allow customers to avoid deposits and credit checks. 

With a prepaid energy plan, customers strictly pay for an initial amount of energy up front and consume it until they have either reached the limit of that particular payment or pay-as-they-go to continue receiving energy. Payless Power instantly approves all customers for no deposit electric plans regardless of their payment history or credit score, lowering the barrier of energy to electric service for all who need it.

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