Early termination fees on Texas electricity plans: how they work and when leaving pays

A fixed-rate contract protects you from price rises, and the early-termination fee is what the provider asks in return. But the fee is a known number, and so is the price of a new plan. That makes "should I break my contract?" a question you can answer with arithmetic.

Where the fee is stated

Your fee is on the Electricity Facts Label (EFL). Texas rules require the EFL's disclosure chart to answer "Do I have a termination fee or any fees associated with terminating service?" with yes or no and, if yes, how much (16 TAC §25.475(g)). The Terms of Service must also state how service can be ended and any penalties that may apply (§25.475(f)(4)(B)). Before you enroll, the provider must disclose whether there is an early-termination fee and the amount (for online enrollment, §25.474(d)(5)(F)). Our guide on how to read an EFL shows where to look.

Fees come in two forms:

A per-month fee shrinks as the contract runs down; a flat fee stays the same until the last 14 days.

What our data shows. As of October 2026, among 559 distinct fixed-rate, non-prepaid offers of 12 months or longer in our data from Power to Choose, 411 charged a flat fee, 143 charged a fee per remaining month ($20 or $15), and 5 charged none. The median flat fee was $150 for 12-month plans and about $250 for 24- and 36-month plans. Your plan may differ; check your own EFL.

The three-day right to rescind

If you switch to a new provider, PUCT rules require it to offer you the right to rescind "without penalty or fee of any kind" for three federal business days after you receive the Terms of Service (16 TAC §25.474(j)). If the provider mails the document first class, it may assume you received it within three federal business days. The Terms of Service must explain how to rescind, including a phone number (§25.475(f)(4)(A)).

This right does not apply to a move-in (starting service at a new address). After the three days pass, the plan's normal fee terms apply.

When there is no fee

• Month-to-month and variable plans. A month-to-month contract (31 days or less) may not contain a termination fee (§25.475(b)(7)).
• The last 14 days. You can usually switch without a fee in the last 14 days before the expiration date. See what happens when your contract ends.
• Moving. No fee may be charged because you move if you give a forwarding address and, if asked, reasonable evidence of the move. See moving in Texas: planning your electricity.
• The provider changes your contract terms. A provider can change some contract terms (not the price or length of a term contract) with at least 14 days' written notice headed "Important notice regarding changes to your contract". If you don't accept the change, you can end the contract with no termination penalty within 14 days of the date the notice is sent (§25.475(d)(3)–(4)). Notice isn't required for changes that benefit you.

Allowed price changes on a fixed plan, such as changes in utility delivery charges, are not changes to your contract terms and don't trigger this window. Check the rule and your own contract for anything else.

The break-even math

The question is simple: will I save more over the remaining months than the fee costs?

Net gain = (current bill − new bill), summed over the remaining months − fee

The monthly difference is not the same every month, because you use far more electricity in summer. Here is a worked example.

Hypothetical current plan: 16¢ per kWh, all-in, the same at any usage. This is an assumption for illustration, not a real plan.

New plan, from our data as of October 2026: the lowest-cost 12-month fixed-rate plan in our default ranking for the Oncor area, at a seasonal average of 1,000 kWh a month (12,000 kWh a year). Three plans with the same published prices were tied for that spot; we estimate each at $1,464 a year, about 12.2¢ per kWh. Prices change daily, so the cheapest plan today will be different.

Usage: our modeled seasonal profile for a home averaging 1,000 kWh, which runs from about 700 kWh in April to 1,500 kWh in August.

On a simple average, the current plan costs $1,920 a year ($160 a month) and the new one $1,464 ($122 a month), a difference of $38 a month. But the months you have left matter:

Now subtract the fee:

What this shows:

• With nine months left and a 3.8¢ price gap, leaving early pays even after a $150 fee.
• With three mild spring months left, a $150 flat fee wipes out the saving. Waiting for the fee-free last 14 days makes more sense.
• The same three months in summer save almost twice as much, because usage is higher, but a $150 flat fee still leaves only about $10.
• A per-month fee favours leaving late in the contract; a flat fee favours leaving early or waiting.

Do the sum with your own current price and usage. Your bills show your kWh and what you paid each month.

Other costs to check

• Deposit. A new provider may ask for a deposit if it can't confirm satisfactory credit (16 TAC §25.478). Some customers, including those 65 or older who are not delinquent on an electric account, are treated as having satisfactory credit. If your old provider holds a deposit, it must transfer it to the new provider or refund it, minus anything you owe (§25.478(j)).
• Bill credits. A new plan with a bill credit may look cheaper at 1,000 kWh than it is in a mild month. See bill credits and the 999 kWh cliff.
• The new plan's own fee. Breaking one contract to sign a 36-month plan with a $250 fee only makes sense if you expect to stay. Choose a term you will finish.

How to use this

1. Find your current fee and expiration date on your EFL or bill.
2. Rank plans on your own 12 months of usage in our plan search; the annual estimate already reflects summer and winter.
3. Estimate the saving over the months you have left and subtract the fee.
4. If it isn't clearly worth it, save your contract in your TexasHomeBills dashboard and we will remind you 30 and 7 days before it ends, so you can switch fee-free in the last 14 days.

We are an independent comparison site, not a provider, and we never enroll you or switch your plan. All costs here are estimates; your contract, EFL and Terms of Service govern what you owe.