What Happens When Your Texas Electricity Contract Expires

Your Contract Has an End Date

Every fixed-rate electricity plan in Texas has a contract end date. When that date passes, your plan changes — and not in your favor.

Most providers move you to what’s called a holdover rate or month-to-month rate. This is a variable rate that’s almost always higher than what you were paying under contract. It’s not a penalty, but it’s not competitive either. Providers count on a certain percentage of customers not noticing or not getting around to shopping.

How Much More Will You Pay?

Holdover rates are typically 30-50% higher than competitive fixed-rate plans. If you were paying 10 cents per kWh under contract, a holdover rate of 14-16 cents per kWh is common. On 1,200 kWh of monthly usage, that’s an extra $48-$72 per month.

Some holdover rates are even worse. There is no cap on what a provider can charge for a month-to-month rate in the deregulated Texas market. Always check what your provider’s current holdover rate is — you can usually find it on their website or by calling.

When Your Provider Is Required to Notify You

Texas regulations require your Retail Electric Provider to send you a notice before your contract expires. The exact timing and format vary, but you should receive at least one notice — typically 30 to 60 days before the contract end date.

The notice must include:

• Your contract expiration date
• Your current rate and plan terms
• Information about the rate you’ll be moved to after expiration
• How to contact them to renew or switch

Don’t rely solely on these notices. Keep your own record of when your contract expires. Set a phone reminder 45 days before your end date.

What to Do Before Your Contract Expires

1. Check Your Contract End Date

Log into your provider’s portal or check a recent bill. The contract end date is usually listed on your bill summary or in your account settings.

2. Start Comparing Plans 30-45 Days Out

This gives you enough time to evaluate your options without feeling pressured. Use ChooseMyPower to see all available plans at your usage level. Look at:

• Rate at your actual usage level — not the advertised 2,000 kWh rate
• Contract length — match it to your plans (are you moving soon? staying long-term?)
• Early termination fee — in case you need to leave early
• Plan structure — fixed, variable, time-of-use, or free nights

3. Lock In a New Plan

Once you find a plan you like, sign up. You can schedule the switch to coincide with your current contract’s end date. There should be no gap in service and no overlap in billing.

If you’re staying with the same provider, they’ll often let you renew at a new rate. If you’re switching providers, the new provider handles the transition — you don’t need to cancel with your old provider first.

What If You Already Missed the Deadline?

If you’re already on a holdover rate, you can switch at any time with no penalty. Month-to-month plans have no early termination fees by definition. Compare plans today and switch — most switches take 1 to 3 business days to process. You’ll pay the holdover rate only for the days until the switch takes effect.