If you paid a deposit to start electric service in Texas, you are likely entitled to get every dollar back, plus interest, after 12 consecutive months of on-time payments. The rules are set by the Public Utility Commission of Texas (PUCT) and apply to every licensed Retail Electric Provider (REP) operating in the deregulated market. What follows is a plain-language explanation of those rules, the timeline you can expect, and the steps to take if a provider does not comply.
Why Providers Collect Deposits in the First Place
REPs in Texas are not required to offer service to customers who present a credit risk without some form of financial protection. Under PUCT Substantive Rule 25.478, a provider may request a deposit if a residential applicant has no established credit history, has poor credit, or has an unpaid balance from a prior account with that provider. The deposit is capped at an amount equal to one-fifth of your estimated annual bill, which works out to roughly 2.4 months of usage. It is not a fee. It is your money held in trust while you prove your payment reliability.
If you paid one, you have plenty of company. About 15 percent of sign-ups on the ComparePower marketplace hit a deposit requirement: 9,616 of 63,950 orders between March 12 and August 19, 2026, per deposit data from nearly 64,000 Texas marketplace orders. Every dollar of that held money is subject to the refund rules below.
When Texas Law Requires a Refund
PUCT Rule 25.478 sets the standard trigger: a customer who has paid every bill on time for 12 consecutive months is entitled to a deposit refund. "On time" means no payment was more than 30 days past the due date during that 12-month window. The provider is required to apply the refund automatically. You should not have to ask for it.
There are two ways the refund is delivered:
- Credit to your account. Most providers apply the deposit plus accrued interest directly to a future bill. The credit appears as a line item, usually labeled something like "Deposit Refund" or "Security Deposit Return."
- Check or direct deposit. Some providers issue a payment directly, particularly if the deposit amount is large relative to your typical bill or if you are closing the account.
If you are closing your account entirely, the deposit must be returned within 30 days of the final bill date, per PUCT Rule 25.478(e). Any outstanding balance is deducted first; the remainder comes back to you.
The Interest Requirement
Texas law does not let providers hold your money for free. Under PUCT Rule 25.478(c), REPs must pay interest on residential deposits at a rate equal to the applicable Federal Reserve discount rate as of January 1 of each calendar year, or 5 percent per year, whichever is greater. The interest accrues from the date the deposit is paid until the date it is refunded or credited.
In practical terms, on a $200 deposit held for 12 months at a 5 percent minimum rate, you would receive approximately $10 in interest. That is a modest amount, but it is money you are owed, and a provider who omits it is not in compliance with PUCT rules.
When you receive your refund confirmation, check that the credit includes both the original deposit amount and an interest line. If the provider only credits the principal, contact their customer service and reference PUCT Rule 25.478(c) by name.
How to Track the 12-Month Clock
The 12-month measurement period begins on the date your deposit was received by the provider, not the date your service started. Those dates are usually close together, but they can differ by a few days if the deposit was mailed.
Keep the following records:
- Your deposit confirmation. Most REPs send an email or letter acknowledging receipt. Save it. The date on that document is your clock start.
- Your monthly bills. A PDF archive of 12 consecutive bills showing the due date and your payment date is your proof of on-time payment. Most providers store at least 24 months of billing history in their online portals.
- Your payment receipts. If you pay by check, keep the canceled check images. If you pay online or through autopay, download the payment confirmation emails.
If you enrolled in autopay from day one, you almost certainly have a clean 12-month record. Autopay payments are processed on the due date, and late payment risk drops to near zero as long as your bank account carries sufficient funds.
What to Do If the Refund Does Not Arrive
Providers are supposed to issue refunds automatically, but the process sometimes stalls due to billing system errors or account mismatches. If 12 months have passed and you have not seen a credit or check, take these steps in order.
Step 1: Contact the provider directly. Call the customer service number on your bill, state that you believe you have met the 12-month on-time payment requirement under PUCT Rule 25.478, and ask for a deposit refund review. Document the date, the representative's name, and the case or ticket number.
Step 2: Give the provider a short window to respond. PUCT rules do not specify an exact business-day deadline for the refund after the 12-month threshold is crossed, but a reasonable expectation is resolution within one to two billing cycles of your request.
Step 3: File a complaint with the PUCT. If the provider does not act, file a complaint through the PUCT's online complaint portal at puc.texas.gov. The PUCT contacts the provider on your behalf and requires a written response. Most complaints at this stage are resolved in the provider's next billing run. Provide copies of your deposit confirmation and your 12-month payment history when you file.
Step 4: Contact the Office of Public Utility Counsel (OPUC). OPUC represents residential customers in proceedings before the PUCT and can escalate complaints that are not resolved through the standard process. Their contact information is available at texasattorneygeneral.gov.
Early Refund Options Before 12 Months
PUCT rules allow a provider to return a deposit before the 12-month mark if a customer demonstrates improved creditworthiness. There is no mandate that a provider must do this, but it is worth asking. If your credit score has improved significantly since you signed up, pulling a free credit report and sharing it with the provider is a reasonable request. Some providers will reduce or eliminate the deposit hold voluntarily to retain a customer who has demonstrated reliability.
Switching Providers Before 12 Months Are Up
If you switch REPs before hitting the 12-month mark, your deposit does not transfer to the new provider. The old provider must return your deposit within 30 days of your final bill, minus any balance owed. The new provider may require its own deposit based on your credit profile at the time of enrollment.
This is worth calculating before you switch. If you are eight months into a 12-month deposit hold and you find a cheaper plan, the savings need to outweigh the potential cost of a second deposit at the new provider. The median plan rate across plans listed on ChooseMyPower as of August 9, 2026, was 15.1 cents per kWh at 1,000 kWh monthly usage. Rate differences of 1 to 2 cents per kWh are common between plans, which amounts to $10 to $20 per month in savings. If a second deposit would cost $150 to $200, a switch four months before your refund date needs to save more than that to break even.
A Note on Deposit Rules Outside the Deregulated Market
The PUCT rules described here apply to customers served by REPs in Texas's deregulated market, which covers most of the state's population including the Houston, Dallas-Fort Worth, and Corpus Christi areas. Customers of investor-owned utilities outside the deregulated zone, such as El Paso Electric or parts of the Oncor territory not open to REP competition, are subject to those utilities' own tariff-based deposit rules. The principles are similar, but the specific timelines and interest rates may differ. Check your utility's tariff on file at the PUCT website if you are unsure which rules apply.
The Short Version
Pay on time for 12 months, and your deposit comes back with interest. Keep your deposit receipt and your payment records. If the refund does not appear automatically, ask for it by name and cite PUCT Rule 25.478. If the provider stalls, the PUCT complaint process is straightforward and effective. Your deposit is your money. Texas law is on your side.