What is Pay as You Go Electricity?

Pay-as-you-go electricity plans are among the many different types of electricity plans available to Texas residents. Pay-as-you-go electricity is very similar to several other types of electricity plans in Texas, including prepaid and no-deposit plans. In most cases, pay-as-you-go is another name for prepaid and no-deposit plans, and you can use the terms interchangeably. 

While pay-as-you-go electricity is all the rage in certain parts of Texas, it is only suitable for some. Understanding the pros and cons of pay-as-you-go electricity is important before you sign up for it. There's a good chance that a better plan is available for your needs. Contact us at GoodCharlie Energy if you're on the fence about pay-as-you-go electricity and want to enroll in a fixed-rate plan instead. 

1. What is Pay as You Go Electricity and How Do These Plans Work? 
2. Is Pay-as-You-Go Electricity Right for Me? 
3. Downsides of Pay-as-You-Go Electricity Plans 
4. What is a Good Alternative to Pay-as-You-Go Electricity? 
5. What is Pay as You Go Electricity and How Do These Plans Work? 
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Despite having a different name, pay-as-you-go electricity is the same as prepaid electricity. With these plans, you pay for electricity at the beginning of the month before you actually use it. It's the same concept as having a prepaid phone or internet plan. You pay for X amount of electricity at the start of the month and get to use up to that amount. 

As with prepaid phone and internet plans, however, you only get to use the electricity you pay for. Once you go over your allotted amount, extra fees and charges could be added to your account. 

Here's how it works when you sign up for pay-as-you-go electricity. 

1. Find a retail electric provider that offers pay-as-you-go electricity plans, aka prepaid electricity. 
2. Check your monthly usage patterns from previous bills to know how much electricity you use per month. 
3. Choose the plan and provider offering the right amount of electricity for your needs. 
4. Once you sign up for the plan and pay your bill, the REP will switch your electrical service and start providing electricity to your home. 

Most companies that offer pay-as-you-go electricity plans will give you three options - 500 kilowatts, 1,000 kilowatts, or 2,000 kilowatts. If you choose the 500-kilowatt plan, you pay the allotted rate for 500 kWh and can use up to that amount. If you pay for the 1,000-kilowatt plan, you purchase 1,000 kWh of electricity and can use up to that amount. The same concept applies to the 2,000 kWh plan. You pay for 2,000 kWh of electricity and can use up to that amount. 

Is Pay-as-You-Go Electricity Right for Me? 

One of the reasons that people love pay-as-you-go electricity plans is that they're easy to sign up for and don't require a deposit or credit check. Pay-as-you-go electricity plans also don't require signing up for a long-term contract, which means you can switch plans anytime. This flexibility and freedom are very appealing to some people, especially those new to Texas or living here short term. 

Here are the types of people for whom pay-as-you-go electricity is perfect.

• Travel nurses, physical therapists, and other healthcare professionals 
• Those visiting Texas for one or more months up to half-a-year 
• People who move to Texas temporarily for work or business 
• Out-of-state oil and gas workers 
• People who are new to Texas and don't know which long-term electricity plan is right for them
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Downsides of Pay-as-You-Go Electricity Plans 

While pay-as-you-go electricity is good for short-term use, it isn't a great long-term investment. They have several downsides that should make you think twice about choosing them. 

Higher Rates 

Because prepaid plans charge a flat rate and don't have any tiers in their plans, they often charge a higher overall rate. For instance, most prepaid plans charge a flat rate of 18 to 21 cents/kWh. While you can end up paying that amount with fixed-rate plans if you're not careful, you have the potential of paying closer to 13 cents/kWh. 

Unexpected Outages 

The biggest downside of pay-as-you-go electricity plans is that once you exceed your prepaid amount, your power company has no obligation to keep providing power to your home. This could result in unexpected outages, which are dangerous in the summer or winter. 

Connection Fee

While pay-as-you-go plans don't require a deposit or down payment, they have what's known as a "connection fee." Connection fees fulfill the same purpose as a down payment and typically cost between $75 and $100. 

Unused Electricity Doesn't Carry Over 

The final nail in the coffin of pay-as-you-go electricity plans is that unused electricity doesn't carry over from month to month. So, if you pay for 1,000 kilowatt-hours of electricity in January and only use 800, that doesn't mean you get an extra 200 kilowatt-hours in February. Instead, your unused electricity gets erased, and you don't get a refund either. 

In addition to these downsides, not all retail electric providers offer pay-as-you-go electricity plans. This makes good plans harder to come by, which leads to many people settling for a bad plan at a high rate. 

What is a Good Alternative to Pay-as-You-Go Electricity?

If you don't think that pay-as-you-go electricity is right for you, consider a fixed-rate plan from GoodCharlie Energy. We're one of Texas's newest and best retail electric providers, and we exclusively offer fixed-rate electricity plans. We also like to keep things simple, so we offer three plan options to our customers when they live in one of our service areas. 

Reasons to Sign Up With GoodCharlie Energy 

In addition to offering competitive rates on our electricity plans, here are a few other reasons to consider enrolling in a plan with GoodCharlie. 

• Unmatched Pack Benefits that are geared towards helping your pets stay safe. 
• A dedication to making Texas the best place for a dog to live in. 
• Outstanding customer service and a handy blog to answer all your pet and electricity questions. 
• We're partnered with several of the top animal shelters in Houston and send monthly donations their way. 
• Renewable energy options on each of our plans. 

To date, we've donated nearly $50,000 to animal shelters and have impacted the lives of more than 300 animals. We're truly a company that cares about more than the bottom line, and we'd love to partner with you. Contact us to make the change to GoodCharlie and start saving money and lives today!