Marketing First Choice Power as "cheaper because no deposit".
Most affiliate guides describe First Choice Power as a budget pick because it skips the deposit. That framing flips the math. A deposit is refundable, typically $200 to $400, returned after 12 months of on-time payments. A higher per-kWh rate is not refundable. It is permanent.
The real comparison is total dollars over a year. A typical Texas fixed plan at 13.0¢/kWh and a First Choice prepaid plan at 16.9¢/kWh diverge by about 3.9¢ per kWh. At the Texas average usage of 1,176 kWh per month, that is roughly $46 per month, or $550 per year. The deposit you skipped was $250.
So First Choice Power is not "cheaper" than a fixed plan. It is accessible to households the fixed-rate market quietly excludes via credit checks, prior-disconnection records, or thin-file credit histories. That is a legitimate product. It is just not the same product as a fixed plan.
How a First Choice Power bill is actually built.
Three layers, same as every Texas REP. The brand only controls one of them.
Layer 1, First Choice
Energy charge
The per-kWh price, hedged by NRG's wholesale desk and resold under the First Choice badge. Prepaid plans price 2 to 5¢ higher than equivalent fixed plans to cover credit risk and daily settlement overhead.
Layer 2, First Choice
Base / monthly fee
Often $0 on prepaid plans and around $9.95 on fixed-term contracts. Prepaid plans may instead carry a daily settlement fee (a fraction of a cent per day) disclosed inside the TOS.
Layer 3, Your TDU
TDU pass-through
Oncor, CenterPoint, AEP or TNMP delivery charges, set by the PUCT and passed through with zero markup. Identical whichever NRG brand you pick.
When First Choice quotes a "16.9¢ prepaid rate", only layer 1 is theirs. Layer 3 stays the same whether you sign with First Choice, Direct Energy, Reliant or Green Mountain.
Prepaid vs fixed: what changes line by line.
A First Choice prepaid plan is not just a fixed plan with the deposit waived. Eight specific things change.
| What changes | First Choice prepaid | Typical TX fixed plan |
|---|---|---|
| Credit check | None | Soft or hard pull, may require deposit |
| Deposit | $0 | $0 to ~$400, refundable |
| Per-kWh rate | ~15 to 18¢ | ~12 to 14¢ |
| Billing cycle | Daily debit from account balance | Monthly bill, 16 days to pay |
| Contract term | Month-to-month | 6, 12, 24 or 36 months |
| ETF | $0 | ~$150 to $295 |
| Disconnection trigger | Balance hits $0 (after PUCT-required notice) | Past-due 10+ days, written notice required |
| Reconnect timing | Often same day after top-up | Same or next business day after payment |
Texas prepaid is governed by PUCT Substantive Rule 25.498, which mandates low-balance text alerts, a minimum disconnection threshold and the right to switch to a postpaid plan with no penalty.
A 3.9¢ premium at 1,176 kWh is $46 per month.
The Texas average residential consumption is roughly 1,176 kWh per month, well above the US average of 886 kWh thanks to summer air-conditioning load. At that usage, the gap between a competitive 13.0¢ fixed plan and a 16.9¢ First Choice prepaid plan is $45.86 per month.
Over 12 months, that compounds to ~$550 per year. The Texas PUCT-allowed deposit a fixed-plan REP would have required is typically $200 to $400, returned after 12 months of on-time payments.
So the trade is: skip a $300 refundable deposit, pay a $550 non-refundable premium. The product only makes sense if a fixed plan would not approve you, or if you would prefer the cash-flow control of daily settlement.
Energy $152.88 + TDU $58.71 + base $0.00
Energy $198.74 + TDU $58.71 + base $0.00
How prepaid electricity is actually regulated in Texas.
Texas prepaid service is not the Wild West. It is governed by a specific PUCT rule that defines exactly how First Choice can charge, alert and disconnect you.
PUCT Substantive Rule 25.498
The 2010 rule that defines "prepaid electric service" in Texas. It mandates a written Terms of Service, daily balance notifications, low-balance text alerts and a $10 minimum disconnection threshold for residential customers.
Smart meter as the engine
Prepaid only works because almost every Texas address has an advanced meter that reports usage every 15 minutes to ERCOT. First Choice debits your account daily based on that data.
Why the rate is higher
Three loaded costs: (1) credit-risk reserve on a no-deposit book, (2) higher service-cycle overhead from daily settlement and SMS alerts, (3) the typical prepaid customer has less price-shopping leverage. NRG sets the prepaid markup to keep margin comparable to its postpaid book.
Switching to postpaid mid-contract
Under Rule 25.498(e), you can move from a First Choice prepaid plan to any postpaid plan (theirs or a competitor's) at any time with no penalty. The brand will return any unused balance.
All four rails (smart meter, PUCT rule, ERCOT settlement, REP top-up portal) are why Texas runs the largest residential prepaid electricity book in the United States. First Choice Power is one of the originals on those rails.
5 mistakes First Choice Power shoppers make.
Five recurring patterns we see in real First Choice contracts. Each is fixable before you sign or before your balance hits zero.
First Choice sits under Direct Energy, which sits under NRG.
Four Texas retail brands, one Houston parent. Each targets a different shopper persona.
The wires charge stays the same whichever NRG brand you pick.
Every Texas address sits inside exactly one regulated delivery utility. That choice was made for you.
What to do before you sign with First Choice Power.
Try a deposit-plan quote first
A refundable deposit beats a non-refundable kWh premium. Apply at one or two fixed-rate REPs; if all decline, then move to prepaid.
Pull the prepaid EFL
The EFL shows rate, daily fees, top-up minimums and the disconnection threshold. Read all of it, not just the headline ¢/kWh.
Set auto top-up
Set the trigger at 2x your average daily debit. That gives 48 hours of buffer before any disconnection alert.
Enable SMS alerts
PUCT Rule 25.498 entitles you to daily balance and low-balance text alerts. They are opt-in. Turn them on at sign-up.
Re-shop at month 6
Six months of clean prepaid payment history often unlocks postpaid plans with no deposit. Switching has no penalty under PUCT Rule 25.498(e).
Contact and bill help
First Choice support: 1-866-469-2464. Bill assistance via Texas LIHEAP/CEAP through TDHCA.
Common questions about First Choice Power.
First Choice Power is a Texas brand of Direct Energy, which has been a subsidiary of NRG Energy, Inc. (NYSE: NRG) since January 5, 2021, when NRG completed the $3.625 billion acquisition of Direct Energy from UK-based Centrica plc. That places First Choice in the same corporate family as Reliant Energy and Green Mountain Energy.
For all residential support, billing, top-up help and prepaid account questions: 1-866-469-2464. For a power outage or meter problem, call your TDU (Oncor, CenterPoint, AEP Texas or TNMP), not First Choice; the REP cannot dispatch trucks.
Three scenarios make the premium worth paying: (1) you have been declined for a deposit plan or asked for a deposit over $400, (2) you want strict cash-flow control and prefer to pay daily rather than monthly, (3) you are a short-term renter or in transition and do not want any contract or ETF. For most credit-clean Texas households, a fixed 12-month plan saves about $550 per year at typical 1,176 kWh usage.
Yes. Under PUCT Substantive Rule 25.498(e), you can move from prepaid to any postpaid plan (with First Choice, Direct Energy, Reliant, Green Mountain or any non-NRG competitor) at any time with no penalty. First Choice must return any unused balance on your prepaid account. We recommend re-shopping at month 6: six months of on-time prepaid payments often unlocks postpaid offers with no deposit.
Texas prepaid disconnection is governed by PUCT Rule 25.498. The REP must send a low-balance text or email when your balance approaches the disconnection threshold (commonly $10), then a separate disconnection notice. After that window, your TDU disconnects remotely via the smart meter. Reconnection is typically same-day after you top up by an amount the EFL discloses (often around $40 to $75).
First Choice serves the deregulated parts of Texas, roughly 85% of the state by population, in the Oncor, CenterPoint, AEP Texas and TNMP zones. If you live in a city served by a municipal utility (Austin Energy, CPS Energy in San Antonio, Brownsville PUB, Greenville Electric, Garland Power and Light, others) or by an electric cooperative (Pedernales, Bluebonnet, Bandera and others), you cannot choose a REP and First Choice is not available; you take the regulated utility tariff.
More U.S. states with energy choice
Same playbook, different utility. Pick another deregulated state to compare utilities, suppliers and switching rules.
