What Happens When Your Texas Electricity Contract Expires (2026)

Consumer Advocate · 7+ years in energy markets

Published January 15, 2025 Updated January 3, 2026

Energy market veteran focused on making electricity shopping simple and transparent.

The Short Answer

When your contract expires, you're automatically moved to an expensive month-to-month rate—typically 30-50% higher than your locked rate. Your provider is counting on you not noticing. The renewal offer they send? Usually 15-25% higher than new customer rates. Best move: start shopping 30-45 days before expiration and switch to a new provider with better rates.

See What You Could Be Paying

Compare your renewal offer against current market rates. You'll probably find something better.

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What Actually Happens When Your Contract Ends

Here's the sequence of events—and the trap most Texans fall into:

30-45 days before: You get a renewal notice

Your provider sends a letter or email with their "offer" to renew. This rate is almost always higher than what new customers pay.

Contract ends: You're moved to variable rate

If you don't renew or switch, you're automatically on month-to-month at whatever rate your provider sets. Often 15-18¢/kWh or higher.

The trap: You pay more every month

Every billing cycle on variable rate costs you money. At 1,000 kWh/month, a 5¢/kWh difference means $50 more per month—$600/year.

✓

The solution: Shop and switch before expiration

Lock in a new fixed rate from any provider. Your service continues seamlessly—same wires, same power, better price.

Why Your Renewal Offer Is (Almost Always) a Bad Deal

Let's be blunt: electricity providers don't offer their best rates to existing customers. Here's why:

The Acquisition vs. Retention Game

New Customer Rates

• Providers compete aggressively for new sign-ups
• Marketing budgets fund low introductory rates
• Comparison sites force transparency
• Result: 9-12¢/kWh typical

Renewal Rates

• Providers know switching seems like work
• They count on you ignoring the notice
• No competition once you're a customer
• Result: 12-16¢/kWh typical

Real Example

Your contract was 10.5¢/kWh. Renewal offer: 14.2¢/kWh. New customer rate from a competitor: 10.8¢/kWh. If you renew instead of switching, you pay $408 extra per year (at 1,000 kWh/month). That's the "loyalty tax."

Your Contract Expiration Timeline

Start comparing rates

Begin shopping for new plans. Rates can change daily, so get a feel for the market.

Lock in your new plan

Most providers let you schedule service to start on your contract end date.

Switching window opens

You can now switch without early termination fees for most contracts.

Contract expires

If you haven't switched, you're now on month-to-month at variable rates.

Key insight: Many providers allow penalty-free switching if your new service starts within 14 days of your contract end date—check your EFL to confirm. Per PUCT rules (§25.474), you also have a 3-business-day rescission right after enrolling with any new provider.

How to Switch Before Your Contract Expires

1

Find your contract end date

Check your bill, log into your account, or call your provider. You need the exact date.
2

Compare current market rates

Enter your ZIP code above to see what's available. Compare against your renewal offer.
3

Select a new plan

Choose based on rate, term length, and any features you want (renewable, rewards, etc.).
4

Schedule service to start on your end date

Most providers let you set a future start date. Pick the day after your current contract ends.
5

Done—your old provider is notified automatically

You don't need to call them. The switch happens behind the scenes through ERCOT.

Should You Stay or Switch?

Consider Staying If...

✓ Your renewal rate is competitive with market rates
✓ You have rewards/loyalty credits you'd lose
✓ You value the relationship (rare but possible)
✓ You've successfully negotiated a lower rate

Switch If...

✓ Your renewal is higher than new customer rates
✓ You're unhappy with customer service
✓ You want different features (green, rewards, etc.)
✓ You've found a better deal (most likely scenario)

Reality check: In 90%+ of cases, switching to a new provider saves money. The electricity is identical—same wires, same reliability. The only difference is price and customer service. Shop the market.

Don't Overpay After Expiration

Compare rates now and lock in a new plan before your contract ends.

Frequently Asked Questions

What happens when my Texas electricity contract expires?

When your fixed-rate contract expires, your provider automatically rolls you onto a month-to-month variable rate plan. This rate is almost always higher—sometimes 30-50% more than your expired contract rate or current market rates. You'll stay with the same provider but pay variable rates until you either renew or switch to a new provider.

Will my electricity get shut off when my contract expires?

No, your electricity will NOT be shut off when your contract expires. You're automatically moved to a month-to-month plan with the same provider. However, you'll start paying the higher variable rate immediately, so it's in your interest to take action before expiration.

Should I accept my provider's renewal offer?

Usually, no. Renewal offers are typically 15-25% higher than the best rates available to new customers. Providers know it's easier for you to stay than switch, so they don't offer their best rates for renewals. Always compare your renewal offer against current market rates before accepting—you can often find better deals by shopping around.

When should I start looking for a new electricity plan?

Start shopping 30-45 days before your contract expires. This gives you time to compare rates, select a plan, and complete enrollment before expiration. Most Texas providers allow you to lock in a new rate up to 30 days before your current contract ends without triggering early termination fees.

Can I switch providers before my contract expires without penalty?

Per PUCT rules, you can always switch without penalty once your contract expires. Many Texas providers also allow penalty-free switching if your new service starts within 14 days of your contract end date—but this varies by provider. Switching earlier may trigger an early termination fee of $150-$400. Always check your Electricity Facts Label (EFL) for exact terms. Note: You also have a 3-business-day right to cancel any new enrollment per PUCT §25.474.

How do I know when my electricity contract expires?

Check your monthly bill—the contract end date is usually listed. You can also log into your provider's online account or call customer service. Texas providers are required to send you a notice 30-45 days before expiration, but don't wait for this—start shopping earlier to find the best rates.

What is the difference between renewal rate and new customer rate?

The renewal rate is what your current provider offers to keep you; the new customer rate is what providers offer to attract new customers. New customer rates are almost always lower—often by 15-25%. Providers invest in acquiring new customers but rely on inertia to keep existing ones at higher rates.

Can I negotiate a lower renewal rate with my current provider?

Sometimes, yes. If you call your provider's retention department and mention you're considering switching, they may offer a lower rate than their standard renewal. Have competing offers ready to reference. That said, the negotiated rate may still be higher than what you'd get as a new customer elsewhere.

What is a month-to-month or variable rate plan?

A month-to-month (variable) plan has no contract term—you can leave anytime with no penalty. However, the rate fluctuates monthly based on wholesale electricity prices. When your fixed contract expires, you're rolled onto this type of plan at typically high rates until you choose a new fixed-rate plan.

How long do I have to switch after my contract expires?

You can switch anytime—there's no deadline. However, every day you stay on the post-expiration variable rate costs you money. Most people are paying 20-40% more than they need to on variable rates. The sooner you lock in a new fixed rate, the more you save.

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How We Ensure Accuracy

Since 2009, the team at ElectricRates.org has helped over 5 million energy consumers find better electricity rates. Supplier information comes from state regulators, company filings, and documented customer feedback. Read the editorial standards & see our methodology.