You've got a food truck permit, a lease on a salon suite, or a pop-up retail space. But the light company wants $500 down because your business is new and has no credit history.
Here's what nobody tells you: most small businesses in Texas can use residential prepaid plans — no deposit, no credit check, same-day activation. You just need to know the threshold where they force you into commercial rates.
This guide covers when you can use residential prepaid, which providers actually serve small businesses, and the real numbers from food trucks, salons, and retail spaces that run on pay-as-you-go.
The Short Answer
If your peak demand stays under 10kW (about 42 amps at 240V), you can use residential prepaid. That covers most food trucks, salon suites, barbershops, small retail, and office spaces under 1,500 square feet. Over 10kW, you're forced into commercial rates with deposits and credit checks.
Residential vs Commercial: The 10kW Line
In Texas, the difference between residential and commercial isn't what's on your business license. It's your peak electricity demand — the highest 15-minute spike in power you pull in a month.
The Classification Rule
Under 10kW peak demand: You're billed as residential. Residential prepaid works. No deposit required with prepaid plans.
Over 10kW peak demand: You're automatically classified as commercial. Commercial deposits apply ($300-800). Credit checks required for traditional plans.
Note: TNMP (Texas-New Mexico Power) uses 5kW as the threshold instead of 10kW.
What Uses 10kW?
✓ Usually Under 10kW
- • Food truck with 2-3 appliances
- • Single salon suite (1-3 stations)
- • Barbershop (2-4 chairs)
- • Small retail (under 1,500 sq ft)
- • Home office or studio
- • Pop-up shop or farmers market booth
⚠ Usually Over 10kW
- • Full restaurant with commercial kitchen
- • Full salon (6+ stations)
- • Retail space over 2,000 sq ft
- • Warehouse or distribution space
- • Manufacturing or production facility
- • HVAC-heavy operations (24/7 cooling)
How to check: Your smart meter tracks peak demand. Log into Smart Meter Texas and look at your 15-minute interval data. If your highest spike is under 10kW, you qualify for residential rates.
Prepaid Providers That Actually Serve Small Businesses
Not every prepaid light company allows commercial use on residential plans. Here's who does and what the real numbers look like.
Pogo Energy
Small Business OKRate
14-17¢/kWh
Daily Fee
$1.95/day
To Start
$50-75
Commercial policy: Explicitly allows small businesses on residential plans if peak demand stays under 10kW. No separate business application needed.
Real Example: Food Truck
750 kWh/month × 15¢ = $112.50 + ($1.95 × 30 days) = $171/month
Payless Power
Commercial Plans AvailableRate
13-16¢/kWh
Daily Fee
$0/day
To Start
$40-60
Commercial policy: Offers both residential prepaid (under 10kW) and dedicated commercial prepaid plans. Call to verify which you need.
Real Example: Salon Suite
450 kWh/month × 14¢ = $63 + delivery charges (~$45) = $108/month
PESO Power
Small Business OKRate
15-18¢/kWh
Daily Fee
Varies
To Start
$45-70
Commercial policy: Allows small businesses under 10kW on residential prepaid. Started in 2020, so less track record than Pogo or Payless.
Real Example: Pop-Up Retail
300 kWh/month × 16¢ = $48 + delivery charges (~$35) = $83/month
Pro tip: Call the light company before you sign up. Tell them it's for a small business and ask if residential prepaid is allowed or if you need a commercial account. Get it in writing (email) if possible.
Before you commit to prepaid, check if you qualify for traditional commercial.
Traditional commercial plans run 30-50% cheaper than prepaid. We check multiple light companies to see if your business qualifies for $0 deposit. New businesses with no credit history often find at least one option. Can't promise it, but it's worth a 2-minute check before locking into higher prepaid rates.
Real-World Scenarios: What It Actually Costs
Here's what small businesses actually pay on prepaid, with real usage numbers and monthly breakdowns.
Food Truck
Dallas, 4 days/week operation, griddle + fryer + refrigeration
Equipment
- • Commercial griddle (3.5kW)
- • Deep fryer (5kW)
- • Walk-in cooler (1.2kW continuous)
- • Lighting and outlets (0.5kW)
- Peak demand: ~8.5kW (under threshold)
Monthly Costs (Pogo Energy)
Usage: ~750 kWh
Energy: 750 × $0.15 = $112.50
Daily fee: 30 × $1.95 = $58.50
Delivery: ~$55
Total: ~$226/month
Why prepaid works: Four-day weeks mean variable income. Prepaid lets them add $60-80 after each weekend instead of facing a $250 bill on the 15th. No $400 deposit to start.
Salon Suite (Single Stylist)
Houston, 150 sq ft suite, Tuesday-Saturday operation
Equipment
- • Hair dryer (1.8kW when running)
- • Flat iron (0.3kW)
- • Mini fridge (0.1kW)
- • LED lighting (0.08kW)
- Peak demand: ~2.5kW (well under threshold)
Monthly Costs (Payless Power)
Usage: ~450 kWh
Energy: 450 × $0.14 = $63
Daily fee: $0
Delivery: ~$45
Total: ~$108/month
Why prepaid works: First month in a new suite. No business credit history, would face $300 deposit with traditional plans. Prepaid got lights on for $45 initial payment.
Barbershop (3 Chairs)
San Antonio, 600 sq ft, Monday-Saturday operation
Equipment
- • 3 clippers charging (0.3kW total)
- • Small AC unit (2.5kW)
- • TV + sound system (0.4kW)
- • Lighting and receptacles (0.5kW)
- Peak demand: ~3.7kW (under threshold)
Monthly Costs (PESO Power)
Usage: ~550 kWh
Energy: 550 × $0.16 = $88
Daily fee: 30 × $0.50 = $15
Delivery: ~$48
Total: ~$151/month
Why prepaid works: Owner has personal credit issues from medical debt. Traditional commercial plans wanted $500 deposit. Prepaid eliminated that barrier.
Pop-Up Retail / Seasonal Shop
Austin, 800 sq ft, 3-month holiday season operation
Equipment
- • LED track lighting (0.4kW)
- • Small AC/heat (1.5kW)
- • POS system (0.1kW)
- • Display lighting (0.3kW)
- Peak demand: ~2.3kW (under threshold)
Monthly Costs (Pogo Energy)
Usage: ~350 kWh
Energy: 350 × $0.15 = $52.50
Daily fee: 30 × $1.95 = $58.50
Delivery: ~$40
Total: ~$151/month
Why prepaid works: Only need lights for 3 months. No 12-month contract required. Walk away when the season ends without early termination fees.
How to Keep Costs Down
Prepaid rates run 30-50% higher than traditional commercial plans. Here's how small businesses actually save money.
Track Your Peak Demand
Log into Smart Meter Texas monthly and check your peak 15-minute demand. If you're consistently under 10kW, you're good. If you exceed 10kW in a single 15-minute interval, your TDU reclassifies you as commercial and applies commercial TDSP rates (typically $15-25/month more).
Fix: Don't run all high-draw equipment at the same time. Stagger your griddle and fryer startup times by 15 minutes.
Avoid Daily Fees
A $1.95/day fee adds $58.50/month whether you use 100 kWh or 1,000 kWh. That's brutal for low-usage businesses like weekend pop-ups.
Fix: Pick Payless Power (no daily fee) if your usage is under 500 kWh/month.
Set Up Auto-Refill
Running out of balance means your lights get cut off the next morning. For a business, that's lost revenue and angry customers showing up to a dark shop.
Fix: Enable auto-refill for $50 when balance drops below $20. Keeps you from getting caught short on a busy weekend.
Shift High-Use to Off-Peak
Some prepaid plans charge higher rates 3-7pm on summer weekdays when the grid is stressed. Pre-cool your space at 2pm instead of cranking AC at 4pm.
Fix: Check your EFL for time-of-use pricing. Adjust operating hours if possible.
The Switch-to-Traditional Timeline
Once your business has 12 months of on-time payment history with prepaid, you qualify for traditional commercial plans with better rates. That's when you save real money.
Example: A food truck paying $226/month on prepaid could drop to $165/month on a 12¢/kWh commercial plan after building payment history. That's $732/year saved.
Skip the 12-month wait. See if you qualify for traditional now.
Don't assume you need prepaid just because your business is new. Every light company has different approval criteria — some approve businesses with no credit history, others want personal guarantees, others look at bank statements. We check multiple options to find who'll work with you. If traditional doesn't work? Prepaid is always there.
Tax Deductions: What You Need to Know
Business electricity is tax-deductible whether you use prepaid or traditional billing. But there's a catch with how prepaid gets categorized.
How to Deduct Prepaid Electricity
✓ Monthly Usage = Deductible Expense
The electricity you actually use each month is a deductible business expense. If you use $150 of prepaid balance in January, that's a $150 deduction for January.
✗ Prepaid Balance = Asset (Not Immediately Deductible)
When you load $100 onto your prepaid account, that's an asset on your balance sheet, not an expense. You deduct it as you use it, not when you pay it. IRS Publication 535
✓ Connection Fees = Deductible
One-time connection fees ($5-15) are deductible business expenses in the year you pay them.
Tracking for Tax Time
Most prepaid providers don't send detailed year-end statements. You need to track it yourself.
Option 1 (Simple): Download monthly usage reports from your light company's app. Add up total kWh used × your rate + fees. That's your deduction.
Option 2 (Precise): Keep a spreadsheet with Date / Amount Paid / Balance Used / Month. Sum "Balance Used" by tax year.
Home-Based Business Split
If you run a business from home and use a single meter for both home and business, you can only deduct the business percentage.
Example: Your home office is 200 sq ft of a 1,000 sq ft home (20%). You can deduct 20% of your prepaid electricity as a business expense. The other 80% is personal and not deductible.
Note: This is general information, not tax advice. Consult a CPA or tax professional for your specific situation.
Common Questions
Can I use a residential prepaid plan for my business?
Yes, if your peak demand stays under 10kW. That covers most food trucks, salon suites, small retail, and office spaces under 1,500 sq ft. Check with the light company first — some explicitly allow it (Pogo, PESO), others require you to call.
What happens if I go over the 10kW threshold?
Your meter automatically flags you as commercial. You'll get a letter saying you're being moved to commercial rates. You'll likely need to switch to a commercial plan, which requires a deposit and credit check unless you find a commercial prepaid option.
Can I get a business tax ID discount on prepaid?
No. Prepaid providers don't offer volume discounts or business-class rates for under-10kW usage. You pay the same rate whether it's residential or small business use.
Do I need a separate meter for my business?
If your business is in a separate location (food truck lot, salon suite, retail space), yes — it has its own meter. If you run a business from your home, you can use the same meter but should track and deduct only the business percentage.
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I cut through the BS. Light companies hide their real rates in the fine print. I show you what you'll actually pay.
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This guide is for informational purposes only and does not constitute legal, tax, or financial advice. For official PUCT rules, visit PUCT Consumer Resources. For tax guidance, consult a licensed CPA. NoDepositLights.com is powered by Compare Power (PUCT License BR190020).
