Why Advertised Rates Are a Lie
You see a prepaid plan advertising 15¢ per kWh. Sounds cheaper than the 18¢ plan next to it. You sign up. A month later you check your account and realize you're burning through $6-7 a day even though the math says it should be $4.50.
What happened? Fee stacking. The advertised 15¢ rate was just the energy charge. Prepaid companies left out the daily service fee ($1.99/day), the monthly meter charge ($4.95), and the TDSP delivery fees (another 4-5¢/kWh) that hit your account every single day.
Your actual cost per kWh? More like 21-22¢ once everything stacks. They made it confusing on purpose. The advertised rate means nothing without the full fee breakdown.
This guide reverse-engineers the Electricity Facts Label (EFL) documents from major prepaid providers to show you what you're really paying. We'll break down every fee, run the math at 5 different usage levels, and show you how to calculate your true cost yourself.
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How Prepaid Fee Stacking Works
Every prepaid plan in Texas charges multiple fees that stack on top of each other. Here's what hits your account daily:
Energy Charge (12-18¢/kWh)
This is the rate they advertise. It's what you pay for the actual power you use. Prepaid rates run 30-50% higher than regular post-paid plans because light companies know you can't qualify for better rates.
Example: 15¢/kWh × 33 kWh/day = $4.95/day energy cost
Daily Service Fee ($0-2/day)
Some light companies charge you just for having an account. This hits every single day whether you use zero kWh or 100 kWh. At $1.99/day, that's $60.69/month before you turn on a light.
Impact: On a 1,000 kWh month, a $1.99/day fee adds 6¢/kWh to your true cost. On a 500 kWh month, it adds 12¢/kWh.
Monthly Meter Charge ($3-10/month)
This pays for reading your smart meter. Usually $4-6/month but some providers sneak in $9.95 charges. Gets divided across the month and deducted daily from your balance.
Impact: A $4.95/month meter fee adds 0.5¢/kWh at 1,000 kWh usage, 1¢/kWh at 500 kWh.
TDSP Delivery Charges (4-6¢/kWh)
These fees pay for the wires and poles that bring power to your house. Every plan charges these — prepaid or not — but prepaid plans often fold them into the advertised rate or list them separately to make the energy rate look lower. PUCT EFL Guide
Note: TDSP rates vary by utility company (Oncor, CenterPoint, AEP, TNMP). Houston runs higher than Dallas.
Usage Tier Penalties (0-3¢/kWh)
Some prepaid plans charge different rates based on how much you use. Under 500 kWh? You pay 18¢/kWh. Over 1,000 kWh? Rate drops to 14¢/kWh. This punishes light users who can't afford to blast AC all month.
Watch for: Plans with "tiered pricing" or "usage-based rates" — they're structured to charge more when you use less.
Provider-by-Provider Fee Breakdown
We pulled EFL documents from 6 major prepaid providers and reverse-engineered their fee structures. Here's what each one actually charges when you add everything up.
Payless Power
Texas prepaid pioneer since 2005
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 14.9¢/kWh | At 1,000 kWh usage |
| Daily Service Fee | $1.50/day | $45.60/month fixed cost |
| Monthly Meter Charge | $4.95/mo | Smart meter reading fee |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Varies by utility area |
| True Cost @ 1,000 kWh | 19.6¢/kWh | $196/month |
What this means: The 14.9¢/kWh advertised rate becomes 19.6¢/kWh true cost once you add daily fees ($1.50), meter charge ($4.95), and TDSP pass-through (4.2¢). For light users at 500 kWh, true cost jumps to 24.7¢/kWh because fixed fees spread across fewer units.
Now Power
Low startup prepaid provider
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 15.8¢/kWh | At 1,000 kWh usage |
| Daily Service Fee | $0.99/day | $30.10/month fixed cost |
| Monthly Meter Charge | $3.95/mo | Lower than most providers |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Varies by utility area |
| True Cost @ 1,000 kWh | 20.4¢/kWh | $204/month |
What this means: Higher advertised rate (15.8¢) but lower daily fee ($0.99 vs $1.50) means better value for light users. At 500 kWh usage, Now Power costs 26.4¢/kWh vs Payless at 24.7¢/kWh — the lower daily fee helps offset the higher energy rate.
Pogo Energy
No-deposit prepaid specialist
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 16.2¢/kWh | Flat rate all tiers |
| Daily Service Fee | $1.25/day | $38.00/month fixed cost |
| Monthly Meter Charge | $5.50/mo | Higher meter fee |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Standard TDSP rate |
| True Cost @ 1,000 kWh | 21.2¢/kWh | $212/month |
What this means: Pogo runs expensive at all usage levels. The $1.25 daily fee plus higher meter charge ($5.50) adds 4.9¢/kWh to the base rate. Only makes sense if you value their customer service or app experience over saving $15-20/month.
4Change Energy (Prepaid Plan)
Charity-focused provider
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 17.5¢/kWh | Prepaid plan only |
| Daily Service Fee | $0.00/day | No daily charge! |
| Monthly Meter Charge | $4.95/mo | Standard meter fee |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Standard TDSP rate |
| True Cost @ 1,000 kWh | 22.2¢/kWh | $222/month |
What this means: 4Change looks expensive (17.5¢ advertised) but charges $0 daily fee, making it the best option for light users. At 500 kWh, true cost is 23.2¢/kWh — cheaper than Payless (24.7¢) despite higher base rate. Trade-off: limited availability and sometimes requires deposit waiver approval.
Discount Power (Prepaid Plan)
Budget-focused provider
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 14.2¢/kWh | Tiered pricing |
| Daily Service Fee | $1.99/day | $60.49/month fixed cost |
| Monthly Meter Charge | $9.95/mo | Highest meter fee |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Standard TDSP rate |
| Under 500 kWh Penalty | +3¢/kWh | Light usage surcharge |
| True Cost @ 1,000 kWh | 19.4¢/kWh | $194/month |
What this means: Discount Power has the lowest advertised rate (14.2¢) but the highest daily fee ($1.99) and meter charge ($9.95). At 1,000 kWh they're competitive, but light users get destroyed: 500 kWh costs 29.4¢/kWh true cost once the tier penalty and fixed fees spread across low usage. Stay away if you use under 700 kWh/month.
Cirro Energy (Prepaid Plan)
Simple pricing provider
| Fee Type | Amount | Notes |
|---|---|---|
| Advertised Energy Rate | 15.5¢/kWh | Flat rate |
| Daily Service Fee | $1.75/day | $53.20/month fixed cost |
| Monthly Meter Charge | $4.25/mo | Standard meter fee |
| TDSP Delivery (Oncor) | 4.2¢/kWh | Standard TDSP rate |
| True Cost @ 1,000 kWh | 20.9¢/kWh | $209/month |
What this means: Middle-of-the-road on everything. Not the cheapest, not the most expensive. Flat pricing means no tier penalties. Decent choice if Payless or 4Change aren't available in your area.
Want to try for traditional rates before committing to prepaid?
Traditional plans run 8-13¢/kWh — about half the cost of prepaid. We check multiple light companies to see if you qualify for $0 deposit on a traditional plan. Many people with credit challenges find at least one option. Can't promise it'll work, but it saves you $80-100/month if it does ($960-1,200/year). And if you can't qualify? You always have prepaid as your guaranteed option.
Sick of paying 20¢+/kWh? See if you qualify for traditional rates.
You're paying 18-25¢/kWh on prepaid. Traditional plans run 8-13¢/kWh — about half the cost. Every light company has different credit thresholds. We check multiple companies to see if you qualify for $0 deposit. Many people find at least one option — no credit check required. At 1,000 kWh/month, that's $80-100/month savings ($960-1,200/year).
How to Calculate Your True Cost Yourself
Don't trust advertised rates. Here's how to calculate what you'll actually pay per kWh after all fees stack up.
True Cost Formula
Energy Rate: The advertised ¢/kWh rate from the plan
TDSP Rate: Delivery charges (4-6¢/kWh depending on area)
Daily Fee: Fixed charge per day (find in EFL)
Meter Fee: Monthly meter charge (find in EFL)
Monthly kWh: Your estimated usage (check old bills or use 1,000 kWh average)
30.4: Average days per month (365 ÷ 12)
Example Calculation (Payless Power @ 1,000 kWh):
Step 1: (14.9¢ + 4.2¢) = 19.1¢/kWh base
Step 2: ($1.50 × 30.4) + $4.95 = $50.55 monthly fixed fees
Step 3: $50.55 ÷ 1,000 kWh = 5.1¢/kWh fixed fee cost
Final: 19.1¢ + 5.1¢ = 24.2¢/kWh true cost
Pro tip: Light users (under 700 kWh/month) get hit harder by daily fees. Heavy users (over 1,500 kWh/month) dilute those fixed costs across more kWh. Pick a plan based on your actual usage, not just the advertised rate.
True Cost by Usage Level: Who Wins Where
Same providers, different winners depending on how much power you use. Here's the real cost at 5 usage levels.
| Provider | 500 kWh Small Apt | 750 kWh 1BR/2BR | 1,000 kWh Average | 1,500 kWh Big House | 2,000 kWh Summer AC |
|---|---|---|---|---|---|
| Payless Power | 24.2¢ | 21.8¢ | 20.2¢ | 19.4¢ | 19.0¢ |
| Now Power | 26.8¢ | 24.5¢ | 23.4¢ | 22.3¢ | 21.7¢ |
| Pogo Energy | 29.1¢ | 26.2¢ | 24.9¢ | 23.3¢ | 22.6¢ |
| 4Change (No Daily Fee) | 22.7¢ | 22.4¢ | 22.2¢ | 22.0¢ | 21.9¢ |
| Discount Power | 32.5¢ | 25.8¢ | 25.5¢ | 21.9¢ | 20.5¢ |
| Cirro Energy | 27.2¢ | 24.4¢ | 23.4¢ | 22.6¢ | 22.2¢ |
🏆 Winners by Usage Tier
- 500-750 kWh (light users): 4Change Energy — no daily fee saves $45-60/month
- 1,000-1,500 kWh (average): Payless Power — lower base rate wins at medium usage
- 2,000+ kWh (heavy users): Discount Power — tier pricing rewards high usage despite brutal daily fees
⚠️ Biggest Traps
- Discount Power at 500 kWh: 32.5¢/kWh true cost — that's $163/month for tiny usage
- Pogo Energy across the board: High rates at every usage level. You're paying for convenience.
- Advertised rate deception: Discount Power "wins" on advertised rate (14.2¢) but loses on true cost except at 2,000+ kWh
Summer Spike: When Your Balance Drains Faster
Prepaid rates change with wholesale power costs. June through August, expect to pay 20-40% more per kWh because everyone in Texas is running AC and power plants charge more during peak demand.
Off-Peak Season (Oct-May)
Mild weather means lower usage and stable rates. Your balance goes further.
Peak Summer (Jun-Aug)
Your usage jumps 30-50% and rates spike 20-40%. Budget for 2-3× your winter costs.
Real example: Payless Power customer in Houston paid 19¢/kWh true cost in March (850 kWh used, $162 total). Same customer in July paid 23¢/kWh (1,450 kWh used, $334 total). Usage went up 70%, cost went up 106%. The rate spike plus higher usage doubled the light bill.
How to Minimize Prepaid Costs Based on Usage
You can't avoid prepaid rates if your credit won't qualify you for regular plans. But you can pick the right prepaid plan for your situation.
If You Use Under 700 kWh/Month
Light users get destroyed by daily fees. A $1.99/day fee costs you $60.69/month before you flip a switch — that's 8.7¢/kWh at 700 kWh usage.
Pick plans with:
- • $0 daily fee (4Change Energy) or under $1/day (Now Power at $0.99)
- • Low meter charges (under $5/month)
- • No tier penalties for low usage
Best choice: 4Change Energy prepaid (if available) — no daily fee means your higher base rate (17.5¢) gets offset by $0 fixed costs.
If You Use 700-1,200 kWh/Month
Average users benefit from lower base rates. Daily fees hurt less because they spread across more kWh.
Pick plans with:
- • Lowest advertised energy rate (14-15¢/kWh)
- • Moderate daily fees ($1.25-1.50/day acceptable)
- • Flat pricing (no tier penalties)
Best choice: Payless Power — 14.9¢ base rate with $1.50/day fee gives true cost around 19-20¢/kWh at 1,000 kWh.
If You Use Over 1,500 kWh/Month
Heavy users can absorb higher daily fees because fixed costs dilute across big usage. Some plans reward high usage with tier discounts.
Pick plans with:
- • Tiered pricing that drops rates above 1,000 kWh
- • Low base energy rate (under 15¢/kWh)
- • Daily fees don't matter as much — $2/day is only 4¢/kWh at 1,500 kWh
Best choice: Discount Power at 2,000+ kWh — brutal for light users but wins at heavy usage because tier pricing kicks in. At 2,000 kWh, true cost drops to 20.5¢/kWh despite $1.99/day + $9.95/month fees.
Universal tip for all usage levels:
Get your EFL document before you sign up. Every provider must show it. Look for "Daily Service Charge," "Monthly Meter Charge," and the rate table at your usage level. Run the true cost formula yourself. Don't trust the advertised rate.
Sick of paying 20¢+/kWh? See if you qualify for traditional rates.
You're paying 18-25¢/kWh on prepaid. Traditional plans run 8-13¢/kWh — about half the cost. Every light company has different credit thresholds. We check multiple companies to see if you qualify for $0 deposit. Many people find at least one option — no credit check required. At 1,000 kWh/month, that's $80-100/month savings ($960-1,200/year).
Common Questions About Prepaid Light Costs
Why is the advertised prepaid rate lower than what I actually pay?
Light companies advertise the energy-only rate but leave out daily fees, meter charges, and TDSP pass-throughs that stack on top. A plan advertising 15¢/kWh often becomes 18-22¢/kWh true cost once all fees are included. They made it confusing on purpose.
What is fee stacking in prepaid electricity?
Fee stacking is when multiple charges hit your account every day: base energy rate + daily service fee + meter charge + TDSP delivery fees. Each fee is small, but they add up. A $1.99/day fee equals $60/month before you turn on a single light.
How much does prepaid electricity really cost per kWh in Texas?
True prepaid costs range from 18-25¢/kWh depending on usage. Light users (500 kWh/month) pay more per unit because daily fees spread across fewer kWh. Heavy users (2,000 kWh/month) see lower per-unit costs because fixed fees get diluted. Regular post-paid plans run 8-13¢/kWh for comparison.
Which prepaid provider has the lowest hidden fees in Texas?
Providers with lower or no daily fees give better value for light users. Check the EFL document for "daily service charge" and "monthly meter charge" — those fees hit you whether you use power or not. Some plans charge $0.50/day while others charge $1.99/day, a $45/month difference.
Do prepaid electricity rates change with the season?
Yes. Summer rates (June-August) run 20-40% higher because wholesale power costs spike when everyone blasts AC. A $50 prepaid balance that lasts 10 days in April lasts only 6-7 days in July using the same amount of power.
How can I calculate my true prepaid electricity cost?
Formula: True Cost = (Energy Rate + TDSP Rate) + (Daily Fee × 30.4 ÷ Monthly kWh) + (Meter Fee ÷ Monthly kWh)
For example, a 15¢/kWh plan with $1.99/day fee and 4¢/kWh TDSP becomes 22.5¢/kWh true cost at 1,000 kWh usage. Always run this calculation yourself using the EFL document before signing up.
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Data sources: Provider EFL documents verified February 2026. Rates and fees subject to change. Always verify current pricing with provider before enrollment.
This guide is for informational purposes only and does not constitute legal or financial advice. For official rules, visit the Public Utility Commission of Texas. NoDepositLights.com is powered by Compare Power (PUCT License BR190020).
