Your Texas Electricity Contract Is About to Expire: The Holdover-Rate Trap (and the 14-Day Window)

Last updated: September 29, 2026

The letter usually looks like junk mail. The envelope says “Contract Expiration Notice. See Enclosed.” — and a lot of Texans toss it or let the email sit unread.

A month or two later, the bill is noticeably higher. Nothing changed at home. The contract just ended, and the price quietly moved.

That’s the holdover-rate trap. It’s legal, it’s disclosed, and it’s easy to avoid if you know the timeline.

What actually happens when a fixed-rate contract ends

Your power doesn’t shut off when a contract expires. Under the Public Utility Commission of Texas (PUCT) customer protection rules — specifically 16 TAC §25.475 — if you take no action, your provider must keep serving you on a default renewal product.

That default product has two defining features:

• It’s month-to-month. You can cancel any time with no fee.
• The price can change every billing cycle. The rule only requires that the pricing terms be clear, not that they be low.

Industry guides and comparison sites commonly call this a “holdover rate.” It isn’t a plan your provider is marketing to win new customers, so there’s no competitive pressure keeping it sharp. Many households find it lands above what they could get by shopping, though the gap depends entirely on the provider and the market at the time.

The good news: you’re not locked in. The bad news: every month you sit on it without checking is a month you might be overpaying.

The notices you’re supposed to get

Texas rules require your provider to warn you — more than once — before a fixed-rate contract ends:

• At least three written notices, spread across the last third of your contract term.
• For contracts of 12 months or longer, the first notice can arrive up to three months before the end date.
• For contracts longer than four months, the final notice must arrive at least 30 days before expiration.
• The notices go by mail, or by email if you opted into electronic communications. The envelope or subject line must say “Contract Expiration Notice.”

The final notice has to include the EFL for the default renewal plan, plus a statement that the default plan is month-to-month and can be canceled without a fee. If you’ve never read an EFL closely, our line-by-line guide to the Electricity Facts Label covers what to look for.

One more protection worth knowing: if your provider doesn’t send the required notices and you don’t pick a new plan, the rule says they must keep charging you under your old fixed-rate terms until they do send proper notice.

The 14-day window: when the cancellation fee disappears

This is the part most people miss.

Your expiration notice must state, in bold, that no early termination fee applies during the 14 days before the expiration date listed in the notice. The notice also has to describe what fee would apply if you leave before that window opens.

So there are really three zones:

1. More than 14 days before expiration: switching may trigger your plan’s early termination fee. Check your EFL — fee structures vary by plan.
2. Inside the final 14 days: you can switch without a termination fee.
3. After expiration: you’re on the month-to-month default plan, which has no termination fee, but you may be paying the holdover price until your switch goes through.

The sweet spot is zone 2. You get to keep your old fixed rate as long as possible and walk away clean.

Two timing details to watch:

• Check which date your notice uses. Some contracts end on a calendar date; others end at the first meter read on or after a certain date. The 14-day window counts back from the date stated in the notice.
• Leave buffer for the switch itself. Texas rules note that establishing service with another provider can take up to seven business days. You can typically pick a start date when enrolling with a new provider, so choose one inside the window rather than waiting until the last day.

What to do, step by step

1. Find your end date now. It’s on your contract documents, and your provider must give it to you on request. Put it on your calendar with a reminder 60 days out.
2. Open the expiration notices. Look for the renewal offers your provider is proposing and the EFL for the default plan.
3. Compare at your real usage. Don’t compare just the headline 1,000 kWh price. Look at the prices on each EFL at the usage level closest to your actual months — especially if you’re on or considering a bill-credit plan, where a few kWh can swing the price a lot.
4. Decide: renew or switch. Your current provider’s renewal offer might be competitive. It might not. Treat it like any other offer.
5. Schedule the switch inside the 14-day window. Set the start date so your new plan begins before the old contract expires. Our guide on how to switch Texas electricity plans without getting burned walks through the enrollment steps.
6. If you already rolled over, don’t panic. You’re on a no-fee month-to-month plan. Shop now and switch — there’s no penalty for leaving.

The real problem is timing, not information

Every piece of this is disclosed. The notices are mandatory, the EFL is attached, the 14-day window is printed in bold. The trap works because the notices arrive weeks before you need to act, and by the time the bill changes, the window has already closed.

If you’d rather not track this yourself, WattKicker sends contract-expiry warnings at 60, 30 and 7 days and compares real plans against your own usage history, so you can pick a replacement before the holdover rate ever shows up on a bill.