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How Does Prepaid Electricity Work with Home Meters?

Texas smart electric meters

For decades, electricity was sold the same way throughout almost all of Texas: meter readers walked from house to house, checking the electricity consumption of customers, and the utilities billed those customers for the electricity used in the previous month. But after Texas deregulated its electricity market in 2002, new ways of paying for electricity emerged, including prepaid electricity.

With prepaid electricity plans, the traditional way of buying electricity is turned on its head. Customers pay upfront in whatever amount they choose, and as they consume electricity, credit is deducted from their prepaid balances, similar to loading a gift card or using a debit card.

Key Takeaways:

Smart meters let your electricity provider know how much energy you're using at any given point in time without having to rely on meter readers. This makes it easy to quickly refill your prepaid electricity account and keep the lights on at home.

What Is a Prepaid Meter?

Just as electricity plans have changed, electric meters have evolved, too. In other parts of the world, customers may pay for their prepaid electric plans with prepaid electricity meters. In England, customers with prepaid electricity meters have smartcards, tokens or “keys” that they load with cash balances at convenience stores or with smartphone apps. These cards, tokens or keys are then used directly with the meter on the house to add electricity credit. In other parts of the world, including parts of Sudan and South Africa, customers purchase unique codes that they enter into keypads on their electric meters to keep them going.

Smart Meters in Texas

In Texas, the most common way you’ll pay for a prepaid or a postpaid (contract-based) electric plan is with a smart meter. Today’s smart meters are capable of broadcasting your energy consumption data directly to your electricity provider using radio waves. That means no more meter readers, but it also means that data can be transferred dozens of times per day, allowing up-to-date readings around the clock. This is the technology that makes prepaid electricity possible in Texas.

Smart meters also make it easy for customers to make prepaid electricity payments. You can add funds to your account without leaving your couch, and through the power of the smart meter, your prepayments will be applied to your account.

Advantages of Electric smart meters

  • Ability to track energy usage
  • Lets your utility know right away if there's a power outage near you
  • Empowers you to make energy-saving choices in the home
  • Saves nearly 2 million gallons of fuel by eliminating the need for in-person meter reads
  • Lets retail energy providers like Direct Energy offer a variety of plans like prepaid electricity, free nights and weekends (time-of use) and more!

Can You Run Out of Prepaid Electricity?

If you use up the last of your prepaid electricity, your service will be disconnected. But Direct Energy makes it easy to keep track of your account. You’ll receive alerts about your balance from us in the manner of your choosing: emails, texts or both. We’ll let you know in advance that the credit in your account is getting low, and as you get closer to running out of credit, we’ll give you an estimate of how much time you have left based on your past energy consumption habits.

With these alerts, Direct Energy makes it easy to stay on top of your electricity payments and make sure you never run out. And if your account does reach zero, your service can be restored quickly once funds are added.

If you need power ASAP with no credit checks, deposits or long-term contracts -- or if you find it easier to budget and conserve energy when you pay upfront -- a prepaid electricity plan from Direct Energy is perfect for you. Direct Energy’s prepaid electricity plans come with great perks and terms, such as no credit checks, no deposits and no need to commit to long-term contracts.

Have a question about a plan or need help placing an order?

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