What Happens When Your Texas Electricity Contract Expires? (And How to Avoid the Month-to-Month Trap)

If you've been enjoying a low, fixed electricity rate in Texas, you might be in for a shock when your contract ends. Many Texans forget their expiration date and default into what the industry calls a 'holdover' or 'month-to-month' rate.

<h2>The Month-to-Month Trap Explained</h2>

When a fixed-term contract expires, your Retail Electric Provider (REP) will automatically transition your account to a variable month-to-month rate. These rates are significantly higher—often double or triple your previous rate. This is because providers have to buy power on the spot market without knowing how long you'll stay.

<h2>The 14-Day Switching Window</h2>

By law, the Public Utility Commission of Texas (PUCT) requires your provider to send you a contract expiration notice at least 30 days before your term ends. Even better, you are legally allowed to switch to a new provider up to 14 days before your contract expires without paying any early termination fees (ETF).

<h2>How to Protect Yourself</h2>

<ul>

<li>Set a calendar reminder for 45 days before your contract ends.</li>

<li>Look for the EFL (Electricity Facts Label) in your renewal notice to see the new default variable rate.</li>

<li>Start shopping for a new fixed-rate plan immediately. Do not accept the first renewal offer your current provider sends—it's rarely their best rate.</li>

<li>Schedule your new plan to start on your exact contract expiration date.</li>

</ul>

Staying on top of your contract dates is the easiest way to avoid bill spikes and save hundreds of dollars a year in the deregulated Texas market.