Here’s what your electricity provider doesn’t want you to know: they’ve designed the entire system around hoping you’ll forget to switch.
Your contract expires. They roll you onto a variable “holdover” rate that can run several cents per kWh higher, with no regulatory cap on where it lands and no promise it’ll stay put next billing cycle. They send you a “renewal offer” that looks like a deal but is still worse than what new customers get. They’re betting on your inertia, your busy schedule, and your assumption that comparing plans is too complicated to bother with.
The Texas electricity industry makes millions every year from customers who switch at the wrong time, or don’t switch at all. You don’t have to be one of them.
The Contract Expiration Trap
The single most important date on your electricity account is when your contract ends. Not because you need to do something special—but because your provider is counting on you to do nothing.
Most Texas electricity plans are fixed-rate contracts lasting 6-36 months. When that contract ends, one of two things happens:
- You get moved to a variable month-to-month rate — commonly 2 to 4 cents per kWh higher than your locked rate, and it can change again next billing cycle (16 TAC §25.475)
- You accept a renewal offer without shopping around — Texas rules require the default to be month-to-month, not a new contract, unless you agree to one, but the renewal offers companies send are often priced worse than what new customers get
Both scenarios benefit your provider. Neither benefits you. The only winning move is to shop for a new plan 2-4 weeks before your contract ends and switch seamlessly—before they can profit from your inaction.
How to Find Your Contract End Date
Check your most recent bill—Texas rules require your company to send at least three expiration notices spread across the last third of your contract, with the final one at least 30 days before a 12-month contract ends (16 TAC §25.475(e)). You can also:
- Log into your provider’s account portal
- Call customer service and ask
- Check your original contract documents
Put this date in your calendar with a reminder 30 days before. Future you will thank present you.
Early Termination Fees: The Hidden Cost of Bad Timing
Leave a fixed-rate contract early and you may pay an Early Termination Fee (ETF). At the largest companies (TXU, Reliant, Gexa, Direct Energy), these typically run as a flat fee: about $150 on a 12-month plan, $295 on a 24-month plan, and up to $395 on a 36-month plan. Some companies, like Rhythm Energy, charge per remaining month instead — often $15-20 for every month left on the contract.
So if you’re 8 months into a 24-month contract with a $20/month ETF, you’re looking at $320 to switch early. Ouch.
When an ETF Might Be Worth It
Sometimes paying the fee makes financial sense. Run the numbers:
Say your current rate is 15 cents/kWh and you find a plan at 10 cents/kWh. You use 1,500 kWh/month. That’s $75/month in savings. If your ETF is $200, you break even in about 3 months.
But here’s the catch: rates fluctuate. That 10-cent rate might not exist in a few months. You’re betting on the market, and the market doesn’t always cooperate.
The ETF-Free Window
You can switch to a new electric company without paying an Early Termination Fee during the final 14 days of your contract (16 TAC §25.475). This is your sweet spot. Start shopping 30 days out, lock in a rate, and schedule the switch for that 14-day window.
Texas rules also waive the ETF if you’re moving — you just need to give your company a forwarding address (and proof of the move, if they ask). That applies whether you’re moving across town, out of their service area, or out of Texas entirely.
Seasonal Rate Patterns
Electricity rates in Texas show some seasonal tendency toward higher summer wholesale costs, but the retail swings are smaller and less consistent year to year than the old advice suggests. Our own month-by-month rate data shows single-digit-percent differences in most years — and in 2026, summer was actually the cheapest stretch of the year. Treat the patterns below as a loose guide, not a guarantee, and check current rates before assuming a season will save you money.
Winter (December-February): Often Competitive
Demand drops when nobody’s running AC, and providers compete for new customers. Winter has been a relatively affordable time to shop in several recent years, though not every year.
Best strategy: If winter rates look good when you check them, sign a longer contract (12-24 months) to lock one in. Major providers like TXU Energy and Reliant Energy offer long-term contracts worth comparing against current rates.
Spring (March-May): Usually Competitive
Rates sometimes climb as providers anticipate summer demand, but in other years spring has been among the cheapest stretches. Compare current rates rather than assuming a trend.
Summer (June-August): Often Higher, Not Guaranteed
ERCOT (the Texas grid operator) is working hard to keep the lights on as everyone’s AC runs. Summer has often meant higher retail rates, but that hasn’t held every year.
If your contract ends in July: don’t assume you’re stuck with the most expensive options — check current rates before you shop. Learn more about seasonal patterns in our guide on when Texas electricity rates go up.
Fall (September-November): Often Competitive
As temperatures cool, rates have eased in some past years, making fall another reasonable window for shopping — but check current rates rather than relying on the season alone.
The Move-In Timing Question
Moving to a new address? You need electricity on day one. Here’s the timeline:
7+ days before move-in: Shop around and pick a provider. Most can set up service with several days’ notice.
3-7 days before: You might pay rush fees or have fewer options. Some providers won’t accommodate short timelines.
Same day: You’re calling whoever will turn on the lights. Expect to pay more and choose from worse plans.
The lesson: Don’t leave electricity setup until the last minute. Shop early, schedule your start date, and you’ll get better rates with less stress.
What About Month-to-Month Plans?
Month-to-month (variable rate) plans have no contract, so no ETF worries. You can switch anytime.
The tradeoff: higher rates. Variable plans typically cost 2-4 cents more per kWh than an otherwise-similar fixed-rate plan. For most people, the flexibility isn’t worth the premium.
When month-to-month makes sense:
- You’re planning to move in a few months
- You want to watch the market and lock in when rates drop
- You’re between permanent addresses
Some providers like Payless Power offer prepaid plans that work similarly—no long-term commitment, but you pay a premium for flexibility. See our full list of best month-to-month providers or learn about prepaid vs traditional electricity options.
The “Switch and Save” Trap
You’ll see ads claiming you can switch anytime and save. Sometimes that’s true. Often it’s not.
What they don’t mention:
- Your current rate might be competitive
- The advertised rate might not include all fees
- Switching costs (including your time) have value
Before switching mid-contract, do the math:
- Calculate your total remaining contract cost at your current rate
- Add the ETF
- Compare to the total cost of the new plan over the same period
- Factor in any signup bonuses or incentives
If the new plan isn’t clearly cheaper after all that, staying put might be the smart move.
How to Make the Switch
Once you’ve found a better plan at the right time:
- Sign up with the new provider: They’ll handle everything
- Provide your current account number and ESI ID (on your bill)
- Choose your switch date: Within your ETF-free window if applicable
- Confirm with your old provider: You shouldn’t have to call, but it doesn’t hurt to verify
The switch happens automatically at midnight on your chosen date. Your power stays on the whole time—you won’t notice anything except a different logo on your next bill.
Timing Checklist
Here’s your action plan:
- Find your contract end date right now
- Set a calendar reminder for 30 days before
- Check rates seasonally, even if you’re not switching
- Compare your current average price per kWh to what’s available
- When you’re in your 14-day window, pull the trigger
Time your switch right and you’ll save money without the headache. Time it wrong and you’re either paying ETFs, overpaying on variable rates, or stuck with whatever’s on offer because you didn’t check.
For more on understanding what you’re paying, check out our guide on how to read your electricity bill. And when you’re ready to compare providers, see our head-to-head provider comparisons to find the right fit. Start with popular matchups like Reliant vs TXU or Frontier vs Gexa.
Frequently Asked Questions
When is the best time of year to switch electricity providers in Texas?
Winter (December-February) and fall have been relatively affordable in several recent years, and spring is often competitive too, but the swings are smaller and less consistent than the old advice suggests — in 2026, summer was actually the cheapest stretch of the year. Check current rates before assuming a season will save you money (see our month-by-month rate data).
Can I switch electricity providers without paying a fee?
Yes, during the last 14 days of your contract, Texas rules allow you to switch without paying an early termination fee (16 TAC §25.475). You can also switch penalty-free if you’re moving to a new address, even mid-contract, as long as you give your company a forwarding address (and proof of the move, if they ask).
How long does it take to switch electricity providers?
The actual switch usually takes 1 to 3 business days with a smart meter once you sign up with your new company, though the notice you receive says it may take up to seven business days. They handle everything, including notifying your old company. Your power stays on continuously—you won’t experience any outage during the switch.
What happens if I don’t switch before my contract expires?
You’ll automatically be moved to your company’s variable month-to-month rate, which can run several cents per kWh higher than your locked rate, with no regulatory cap on the price (16 TAC §25.475). Your company may also send you a renewal offer, but Texas rules require the default to be month-to-month — they can’t auto-renew you into a new contract without your consent. Either way, you lose money by not shopping before expiration.