Electric Deposits Explained: When You Pay and Get It Back

• You are a new customer with no history with the company.
• A credit check shows a low score or past unpaid utility bills.
• You have been late or disconnected for nonpayment in the past.
• You are asking to reconnect after a shutoff for nonpayment.

Utility companies often use their own tests, such as a credit check or a record of past payments. In states with retail choice, each provider sets its own tests inside state rules, so one provider may ask for a deposit and another may not.

The limit differs by state and sometimes by company. Many rules tie it to a share of your expected billing. Texas is a clear example because its rule sets exact limits. For a residential customer the deposit cannot exceed the greater of one-fifth of the estimated annual billing, or the estimated billings for the next two months.

An example with an EIA average, not a quote: the average Texas household paid $170.95 a month in 2025, about $2,051 a year. One-fifth of that is about $410.

Source: 16 Tex. Admin. Code § 25.478, checked October 9, 2026. Other states have their own rules. Check your state commission.

• Show payment history. A record of on-time payments with another utility can qualify you in some states.
• Ask about a waiver. Some rules waive deposits for older customers or for certain hardships. Ask in writing and give the proof.
• Ask for a guarantee or alternative. Some companies accept a letter of guarantee in place of cash.
• Try prepaid service, where it is offered. In Texas, a prepaid provider must not require a deposit.
• Compare providers in retail choice states, since each sets its own credit test.

A deposit is your money. Many states require interest, and many require a refund after a period of on-time payments. In Texas a deposit must be refunded after 12 consecutive billings with no late payments, and it is also returned when service ends or the provider is no longer yours. Interest is due unless the refund comes within 30 days.

Ask for a written receipt, and ask how and when the refund happens, whether as a bill credit or a check. Keep the paperwork until it is back. The no deposit electricity page for Texas gives the full rule summary, and the national page explains the idea for other states.

• How is the amount calculated, and can it rise later?
• Is interest paid, and at what rate?
• When is it refunded, and as a credit or a check?
• Can I pay in installments?
• Is there any way to skip it, such as a guarantee or a prepaid plan?

If service was shut off for nonpayment, a company may ask for a deposit before it reconnects, along with the past-due balance and a reconnection fee. Ask for the amounts in writing and for a payment arrangement if you need one. Your state commission lists the rules on how fast service must be restored once you pay.

Many renters put the electric account in their own name and face a deposit as new customers. Some leases include electricity in the rent. If yours does, there is no account in your name and no deposit. Ask your landlord what applies before you apply, and keep a copy of the lease terms.

• 16 Tex. Admin. Code § 25.478, Credit requirements and deposits
• U.S. Energy Information Administration, Form EIA-861 (final 2025 data)