What happens when your Texas electricity contract ends

Most Texas households in competitive areas are on a fixed-rate contract that runs for a set number of months. What happens at the end of that term matters more than many people realize, because the rate you slide onto can be very different from the one you signed up for.

You will get expiration notices

Texas customer protection rules (16 TAC §25.475) require your provider to warn you before a fixed-rate contract expires. For residential fixed-rate contracts:

• The provider must send at least three written notices, spread across the last third of the contract.
• For contracts of 12 months or more, the first notice can come up to three months before the end date.
• The final notice must arrive at least 30 days before the contract expires for contracts longer than four months (at least 15 days before for contracts of four months or less).
• If the provider fails to send proper notice, it must keep serving you at your fixed price until it does (§25.475(e)(1)(C)).
• The envelope or email subject must say "Contract Expiration Notice. See Enclosed."

The notice must show the expiration date in bold, underlined text, describe any renewal offers, and include the Electricity Facts Label for the default product you will get if you take no action. These emails are easy to mistake for marketing, so it is worth opening anything with that subject line.

If you do nothing: the month-to-month default

If you don't respond, the provider does not cut you off. Under the rules it must keep serving you on a default renewal product that is month-to-month. That product:

• can be cancelled at any time without a fee, and
• can change price from one billing cycle to the next.

The month-to-month price is often higher than the provider's new fixed offers, and it is not locked. For a household on a summer-heavy usage pattern, a few months on a higher variable rate during July and August can add up. That is why it usually pays to choose a new plan before the end date rather than after.

The 14-day window

Your contract may carry an early-termination fee if you leave early. But under PUCT rules you can usually switch in the last 14 days before the expiration date without paying that fee. The expiration notice must state this in bold type when the contract has a termination fee.

A few practical points:

• Count back 14 days from the expiration date printed on your notice, not from when you received it. Some contracts define the end date by a meter read on or after a certain date, which can shift it slightly.
• When you enroll with a new provider you can usually ask for a start date, so you can line it up with the window.
• Check your own contract and notice. Rules have exceptions, and terms differ by plan.

If you move out of your home, you usually do not owe a termination fee either, as long as you give a forwarding address and, if asked, reasonable evidence of the move.

A simple timeline

Let us remind you

Expiration dates are easy to forget, especially when a contract runs two or three years. In your TexasHomeBills dashboard you can save your current contract with its end date. We then:

• email you 30 days and 7 days before it ends, and
• give you a calendar link you can add to Google Calendar, Apple Calendar or Outlook. It creates three dates for each contract: a reminder to shop 30 days before, the day the 14-day window usually opens, and the end date itself.

When it is time to shop, compare plans on a full year of usage, not just the 1,000 kWh price. Start with your area, such as Oncor or CenterPoint, or read how we rank plans. If you are looking at plans with bill credits, our guide to bill credits and the 999 kWh cliff explains what to check.

Moving soon? See moving in Texas: planning your electricity. Thinking of leaving before the end? Work out when breaking a contract pays.

We are an independent comparison site, not a provider, and we never enroll you or switch your plan. This article is general information, not legal advice; your contract and notices govern your situation.