The Short Answer

Texas law, enforced by the Public Utility Commission of Texas (PUCT), gives residential and small commercial customers a right of rescission when they switch retail electricity providers. The window is three federal business days from the date you receive your Terms of Service document (a separate document from the Electricity Facts Label and Your Rights as a Customer disclosures sent in the same enrollment packet). Cancel inside that window and the provider cannot charge you an early termination fee, and your service will simply stay with your current provider and the pending switch order will not proceed.

This right exists specifically to give consumers a pressure-free moment to re-read the documents they agreed to, compare them with alternatives, and exit cleanly if something does not look right.

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What the Right of Rescission Covers

The PUCT's customer protection rules (16 TAC §25.474(j)) require every retail electric provider (REP) to honor a three-federal-business-day cancellation window on switch requests. The clock starts when you receive the Terms of Service disclosure, not when you signed up verbally or clicked a confirmation button.

A few points worth understanding:

  • Federal business days is the rule's own term. Section 25.474(j) sets the window without laying out a counting method, but the commission has anchored the phrase to a federal standard: for door-to-door enrollments the rule ties the three-federal-business-day rescission right to the Federal Trade Commission's Cooling-Off Rule, 16 C.F.R. Part 429, which defines a business day as any calendar day except Sunday or a federal holiday. Saturdays count. Regulation Z, the other federal rescission standard borrowed for the phrase, counts the same way: Saturdays in, Sundays and legal public holidays out. Providers still do not describe it identically: at least one REP's enrollment disclosure says the three federal business days include Saturday, while other consumer guides describe the window as Monday through Friday excluding federal holidays. Note also that the clock starts on your receipt of the Terms of Service, not on the day you enrolled, so the safe approach is to count the shortest version, assume Saturdays count, and cancel well before day three.
  • The right applies to residential and small commercial customers, generally non-residential accounts with peak demand under 50 kW during any 12-month period. Larger accounts may agree to different contract terms and should check their agreement directly.
  • The window covers switch requests, changing providers at your existing address. It does not apply when you request new service at a premise (a move-in), and it is not a general right to exit mid-contract whenever rates rise.
  • The clock runs from your actual receipt of the Terms of Service. For mailed documents, the rule lets the provider assume a first-class USPS delivery is received within three federal business days, so do not wait to check your inbox or mailbox.

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When the Right Does NOT Apply

This is the part most guides skip, and skipping it costs consumers money.

The three-day rescission right does not protect you from the early termination fee once the window closes. If you cancel on day four or later, standard contract terms apply. For fixed-rate plans, the amount varies widely by provider and contract length, and PUCT rules require it to be disclosed on the plan's Electricity Facts Label. Third-party listings for the APGE SimpleSaver plan referenced later in this article, for example, show a $150 fee on an 11- or 12-month term, $250 at 18-24 months, and $350 at 36 months, while some plans charge per remaining month instead, often in the $15 to $25 range. The only figure that binds your account is the one printed on your own EFL.

The right is narrower, or less useful, in these situations:

  • Month-to-month variable-rate plans. The rescission right still attaches to any switch request, but these plans have no fixed term and no early termination fee, so the window matters less. You can leave any billing cycle.
  • Renewals you initiated. If your plan was expiring, your provider sent a renewal notice, and you actively accepted new terms, you are in a new contract. The rescission right is tied to switch requests to a new provider, so it does not attach to a renewal with your existing provider. Your protection there is the contract expiration rule: no early termination penalty applies during the 14 days before the expiration date stated in your notice.
  • Situations where service has already begun. If your meter has already switched and you have consumed electricity under the new plan, some providers argue the rescission is no longer clean. The PUCT rules do not explicitly bar rescission after service starts, but disputes become more complicated. Cancel as early as possible.

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How to Cancel: Step by Step

This is a how-to process, and the steps matter. A vague phone complaint is not a rescission request, but a clear spoken one is: under 16 TAC §25.485(b)(4) every REP and aggregator must maintain 24-hour capability for accepting a customer's rescission of the terms of service by telephone. Say the words plainly, then put them in writing.

Step 1: Locate your Terms of Service delivery date. Check your email for the provider's welcome packet. The date on that email is your start date. If it arrived by mail, note the postmark or the date printed on the cover letter.

Step 2: Confirm you are inside the window. Count three federal business days forward from the delivery date. If today falls on or before day three, proceed. If you are on day four or later, weigh whether the cancellation is worth the early termination fee, or consider a month-to-month plan as your next move to avoid locking in again.

Step 3: Contact the provider in writing. A phone call is faster, but a written record is essential. Send an email or use the provider's online account portal to submit a cancellation request. In the message, state clearly: the account holder name, the service address, the enrollment date, and the statement that you are exercising your right of rescission under PUCT rules. Keep a copy.

Step 4: Follow up by phone to confirm. Call the provider's customer service line and ask for a cancellation confirmation number. Write it down. Ask the representative to confirm that no early termination fee will be applied.

Step 5: Verify with your current or default provider. If you were switching from an existing provider, call them to confirm the switch order was pulled back. If a pending switch is cancelled, you simply remain with your current provider. Provider of Last Resort (POLR) service, the PUCT-designated backup provider in each competitive area, applies in other circumstances, such as when your provider exits the market. Ask the PUCT's customer helpline (1-888-782-8477) if you are uncertain about your service status.

Step 6: Save everything for 90 days. Keep confirmation emails, call logs with dates and representative names, and any written correspondence. If a provider bills you an early termination fee after a valid rescission, file a complaint with the PUCT at puc.texas.gov. The PUCT has authority to order refunds and assess fines against providers who violate rescission rules.

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Why Shoppers Need This Right More Than They Realize

The Texas retail electricity market lists a wide range of plan structures, and not all of them are as straightforward as the advertised rate suggests. As of September 15, 2026, the Choose My Power daily plan snapshot covering 122 live plans from 17 providers found that 16 of those 122 plans carry a bill-credit cliff, meaning the bill at 500 kWh runs $25 or more above the bill at 1,000 kWh. A household that enrolled expecting a flat rate and then reads its Terms of Service carefully might find a tiered billing structure that does not match its usage pattern. The three-day window is exactly the moment to catch that mismatch and exit without penalty.

The median listed rate across those same plans was 14.9 cents per kWh at 1,000 kWh (Choose My Power snapshot, September 15, 2026). The lowest available was 6.6 cents per kWh all-in at 1,000 kWh on the APGE SimpleSaver 12 plan in the lowest-cost utility area. The spread between those two numbers is large enough that enrolling in the wrong plan by mistake carries a real annual cost. The rescission right exists precisely to give consumers a chance to correct that mistake before it compounds across 12 months.

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A Note on Re-Enrolling After Cancellation

Canceling under the three-day rule does not put a mark on any record. There is no blacklist, no credit impact, and no obligation to explain the cancellation to a new provider. A consumer who cancels and then re-enrolls with a different provider simply begins a new three-day window under the new enrollment.

If the goal is to move to a genuinely lower rate rather than to stay where things are, use the rescission window to do the comparison properly. Read the Electricity Facts Label line by line, check the rate at the actual usage level the household runs (not always the 1,000 kWh number in the headline), and look specifically for minimum usage requirements or bill-credit thresholds buried in the pricing table.

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The Bottom Line

The three-day right of rescission is a straightforward, legally guaranteed exit from a new electricity enrollment. Use it by writing to the provider inside three federal business days of receiving the Terms of Service, confirming cancellation in writing, and documenting everything. Miss that window and standard contract terms apply, including early termination fees that most fixed-rate plans carry. The right is only useful if the consumer acts quickly and keeps a record.