If you skip the renewal deadline on a Texas electricity contract, your power keeps running. What changes is the price you pay, and that shift can catch a lot of households off guard.
Most fixed-rate plans in the deregulated Texas energy market don’t simply disappear when the term ends. Instead, your retail electric provider (REP) automatically moves your account to a different pricing structure, often a month-to-month variable rate that can jump with little warning.
Knowing what that rollover plan looks like, and how to compare it with other options before your contract expires, can mean the difference between a smooth transition and an unpleasant surprise on next month’s bill.
Your Power Stays On, but Your Plan and Rate May Change
Nothing happens to your electricity service itself when a Texas contract ends. The transmission and distribution utility (TDU) that owns the poles and wires in your area, whether that’s Oncor, CenterPoint Energy, AEP Texas or Texas-New Mexico Power, keeps delivering power just as it always has.
What changes is the pricing behind your electricity bill, because your REP typically shifts your account to a default renewal product once your fixed term expires.
What Is a Default Renewal Product or Holdover Rate?
A default renewal product, sometimes called a holdover rate, is the plan your provider automatically places you on if you take no action before your contract ends. It’s usually a month-to-month variable-rate plan with no fixed term and no early termination fee.
That flexibility comes at a cost. Holdover rates are often higher than the fixed-rate plans REPs advertise to new customers, and the provider can adjust the rate per kWh from one billing cycle to the next.
Why a Month-to-Month Variable Rate Can Change Your Bill
A variable-rate plan means your REP can adjust the energy charge according to its pricing terms, which are often loosely tied to wholesale electricity prices set through ERCOT’s grid operations. When wholesale prices climb during a Texas summer or winter cold snap, your holdover rate can climb with them.
That setup is different from a fixed-rate plan, where the energy charge stays locked for the length of the contract. On a variable plan, there’s no such lock.
You could see a noticeably higher rate on your next bill with little advance notice, especially during high-demand months when ERCOT calls on more expensive power plants to keep the grid stable.
What Does Not Change When You Renew or Switch Providers?
Your TDU and physical connection stay the same no matter what happens with your retail plan. Renewing, rolling over or switching to a brand-new REP, whether that’s TXU Energy, Reliant, Direct Energy, Gexa or Rhythm, does not affect which company owns the wires or reads your meter.
Outage response, meter maintenance and line repairs all remain with your local utility. Only the company billing you for the electricity itself changes.
How to Avoid an Unwanted Rollover Before Your Contract Ends
Avoiding a rollover rate comes down to knowing your exact contract end date and shopping for a new plan before that date arrives. The Public Utility Commission of Texas (PUCT) requires REPs to send a contract-expiration notice ahead of time.
That notice contains the details you need to compare your options and act before a holdover rate takes effect.
Where Can You Find Your Contract End Date?
Your contract end date appears on your most recent electricity bill, inside your provider’s online account portal or in the Terms of Service document you received when you signed up. If none of those are handy, call your REP’s customer service line and ask directly.
Don’t use your billing cycle date as a stand-in for the actual contract expiration. The two dates can be different, and confusing them is one of the most common mistakes Texans make when planning a switch.
What Should You Check in a Contract-Expiration Notice?
Your provider is required to send a renewal notice before your fixed-rate term ends, and it should spell out what happens if you do nothing. Review it for a few specific details:
- The exact date your current contract expires.
- The rate and terms of the default renewal product you’ll be moved to automatically.
- Any renewal offer the provider is presenting as an alternative.
- Whether the renewal offer includes a new contract length and a new early termination fee.
Treat the renewal offer as one option to compare, not the obvious choice. Pull the current Electricity Facts Label (EFL) for that offer and read it alongside offers from other providers.
When Can You Switch Without an Early Termination Fee (ETF)?
Under PUCT rules, including 16 TAC §25.475, you can typically switch to a new electricity provider within the final 14 days before your contract’s expiration date without triggering an early termination fee (ETF) tied to your current plan. Scheduling your new plan’s start date within this window is the safest way to move on without a penalty.
If your contract has already expired, you’re no longer under a fixed term, so most REPs won’t charge an ETF for leaving a month-to-month holdover plan. Confirm this with your specific provider before assuming it applies.
Should You Accept a Renewal Offer or Choose a New Plan?
A renewal offer from your current REP isn’t automatically your best or worst option, so give it the same scrutiny you’d give a competitor’s plan. Compare its rate structure, contract length and any bill credits with new-customer offers available at your address.
Providers sometimes price renewal offers higher than what they advertise to new sign-ups, since existing customers are less likely to shop around. Pulling the EFL for the renewal offer and checking the base charge, energy charge and TDU charges will show whether it’s competitive or worth passing on.
How to Compare Plans Using Your Actual Electricity Usage
Comparing plans at your real usage level, rather than the generic 1,000 kWh example used in most advertising, gives you a much clearer read on cost. Pull the last 12 months of kWh from your provider’s portal or old bills, then check how each candidate plan performs during your lowest, average and highest usage months.
This matters most for plans with bill credits or usage tiers. A plan that looks cheap at exactly 1,000 kWh can turn expensive at 900 or 1,500 kWh.
Power to Choose, the state’s official comparison site for deregulated areas, is a useful starting point for viewing multiple offers side by side.
Once you know your usage pattern, you can compare electricity rates for your address and see how current plans stack up against your provider’s renewal offer or holdover rate.
What to Do if Your Contract Has Already Expired
If your fixed-rate term has already lapsed, check your most recent bill to confirm whether you’ve been moved to a variable holdover rate. Look at the rate per kWh on that bill and compare it with your old fixed rate to see how much more you’re paying.
From there, you’re free to shop for a new fixed-rate plan without worrying about an early termination fee from your expired contract. Take the same approach you would before expiration: pull your usage history, compare EFLs from a few providers and check current electricity plans available in your TDU territory before locking in a new term.
Conclusion
Letting a Texas electricity contract lapse doesn’t cut your power, but it usually means paying a variable holdover rate that can rise with wholesale prices. Finding your exact contract end date, reading the renewal notice closely and comparing that offer against other plans at your real usage level puts you back in control of the price you pay.
Whether your term is about to expire or already has, checking current offers for your ZIP code is the fastest way to avoid overpaying on a plan you never chose on purpose.