Quick Answer
Understand the fine print in Texas electricity contracts before committing to a plan.
Contract Length Options in Texas
Texas electricity contracts typically range from month-to-month to 36 months.
| Contract Length | Best For |
|---|---|
| Month-to-month | Maximum flexibility, but exposed to market volatility |
| 6-month | Those expecting to move soon |
| 12-month | Balance of rate security and flexibility |
| 24-month | Maximum rate stability |
| 36-month | Lock in low rates long-term |
Remember: Switching mid-contract typically triggers early termination fees of $50-200 per month remaining.
Fixed Rate vs. Variable Rate Contracts
| Rate Type | How It Works | Risk Level |
|---|---|---|
| Fixed-rate | Same per-kWh rate throughout term | Low—protects against summer spikes |
| Variable-rate | Fluctuates monthly based on market | High—can double or triple in extreme weather |
| Indexed | Tied to market indices (like natural gas) | Medium—predictable formula but variable output |
Seasonal reality:
- Fixed rates cost slightly more in spring/fall
- Fixed rates save significantly during summer peaks (June-September)
Most Texas consumers prefer fixed rates for budget predictability.
Early Termination Fees Explained
Early termination fees (ETFs) apply when you cancel a fixed-rate contract before it ends.
| ETF Type | Typical Amount |
|---|---|
| Per-month remaining | $50-200/month (most common: $150) |
| Flat fee | $100-300 regardless of remaining term |
ETF waivers typically apply for:
- Moving out of state
- Military deployment
- Death
Watch out: Moving within Texas may trigger ETFs unless you transfer service to your new address with the same provider.
The PUCT requires ETF disclosure in your EFL. Always read the Terms of Service for complete details.
Auto-Renewal Clauses and How to Avoid Them
Most Texas electricity contracts include auto-renewal clauses that roll you onto a month-to-month variable rate when your term ends. These rates can be 50-100% higher than competitive fixed rates.
The trap:
- Providers send renewal notice 30-45 days before expiration
- Many consumers miss these notices
- You end up on expensive variable rates
How to avoid it:
- Set calendar reminders 60 days before contract end date
- You can switch providers in the final 14 days without ETF penalties
- Some providers offer dedicated renewal rates that beat standard offers
Frequently Asked Questions
Can I cancel my Texas electricity contract without penalty?
What happens when my Texas electricity contract expires?
How do I know what's in my Texas electricity contract?
Looking for more? Explore all our Understanding Deregulation guides for more helpful resources.
About the author
Consumer Advocate
Enri knows the regulations, the fine print, and the tricks some suppliers use. He's spent years learning how to spot hidden fees, misleading teaser rates, and contracts that sound good but cost more. His goal: help people avoid the traps and find plans that save money.
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Topics covered
Sources & References
- Public Utility Commission of Texas (PUCT): "PUCT guidance on electricity contracts"Accessed Dec 2025
Last updated: December 31, 2025
