When a provider can ask for a deposit
A retail electric provider may make service depend on satisfactory credit. For a residential applicant, the rules for providers tied to a delivery company and for the default provider list these ways to show it:
- Prior service. You had service with any provider or utility in the last two years, are not behind on any such account, and were late no more than once in the last 12 consecutive months.
- Credit rating. You have a satisfactory credit rating from a consumer reporting agency. The rule sets no score.
- Age. You are 65 or older and not currently delinquent on an electric account.
- Family violence. You are certified as a victim through a listed source.
- Medically indigent. Income at or below 150 percent of the poverty guidelines, with a physician's certification or large medical costs, shown each year.
Other providers must at least honor the age and family violence routes, and they may add their own non-discriminatory tests, which is why many use a credit check.
Source: 16 Tex. Admin. Code § 25.478, checked October 9, 2026.
How large a deposit can be
The total of initial and additional residential deposits cannot exceed the greater of two amounts: one-fifth of the customer's estimated annual billing, or the sum of 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, which is about $2,051 a year. One-fifth of that is about $410. If the next two months are summer months that cost more, the two-month figure can be higher, and the cap is the larger of the two.
Source: 16 Tex. Admin. Code § 25.478, checked October 9, 2026.
Ways around a cash deposit
- A letter of guarantee. A provider tied to a delivery company, and the default provider, must offer a written guarantee as an option in place of a cash deposit.
- Prepaid service. A prepaid provider must not require a deposit. See Texas prepaid electricity.
- A different provider. Providers set their own credit tests within the rules, so a refusal at one does not mean a refusal at all.
- Ask for a waiver in writing. If you meet one of the satisfactory credit tests, give the proof and ask the provider to confirm that it waives the deposit.
Interest, refunds and paperwork
- Interest. The provider pays interest at a rate at least equal to the one the commission sets each year. If it refunds the deposit within 30 days, no interest is due.
- Refund. A deposit must be refunded after 12 consecutive residential billings paid with no late payments. A refund can come as a bill credit. A deposit is also returned when service ends or when the provider is no longer your provider.
- Written notice. The provider must explain its deposit policy, your right to a guarantee where it applies, how refunds work and when a deposit can rise, in the Terms of Service or in Your Rights as a Customer.
- Receipt. It must issue a receipt or show the deposit on your bill and keep deposit records.
The rule has no provision for paying a deposit in installments, and it sets short payment windows, such as ten days after a request. If you need time, ask the provider directly whether it allows installments.
Frequently asked questions
Can a Texas electricity provider charge a deposit?
Yes, if the applicant lacks satisfactory credit as the rules define it. The deposit is capped, and a prepaid provider cannot require one.
How much can a Texas electricity deposit be?
For a residential customer, no more than the greater of one-fifth of the estimated annual billing or the estimated billings for the next two months.
Who is exempt from a deposit in Texas?
Applicants who show satisfactory credit through service history or a credit rating, those 65 or older who are not delinquent, family violence victims and some medically indigent households, under the rules for providers tied to a delivery company and for the default provider.
When do I get my Texas electricity deposit back?
After 12 consecutive residential billings paid with no late payments, when service ends, or when the provider is no longer your provider. Interest is due unless it is refunded within 30 days.