Compare renewal rates
Your power stays on. Your provider automatically moves your account to a month-to-month holdover rate — also called a default variable rate, out-of-contract rate, or default renewal product. This is not a negotiated rate. It is the provider’s default pricing, and it is almost always the most expensive rate available on the Texas market.
How much more expensive? On a business consuming 50,000 kWh per month, the difference between a competitive fixed rate and a holdover rate is typically $1,000–$3,500 per month — money that comes directly off the bottom line until you sign a new contract.
| Scenario | Energy Rate | Monthly Cost | Annual Cost |
|---|---|---|---|
| Competitive fixed contract | 6.5¢/kWh | $3,250 | $39,000 |
| Holdover / variable rate | 10.5¢/kWh | $5,250 | $63,000 |
| Overpayment | +4.0¢/kWh | +$2,000/mo | +$24,000/yr |
Energy-only rates shown. Total all-in cost includes TDU delivery charges, which remain the same regardless of provider.
The holdover rate is not a penalty — your provider is not violating any rules. Under PUCT regulations, they are required to continue serving you, and they are allowed to set the holdover price at whatever the market will bear. Most providers set it well above their competitive fixed rates because there is no incentive to discount a customer who has already missed their renewal window.
The single most important action in commercial electricity management is not picking the right provider — it’s picking the right time to shop. Starting early gives you leverage. Starting late costs you money.
Identify your contract end date, note any auto-renewal opt-out deadlines, and set a calendar reminder. Request your historical interval usage data from your current provider — REPs need this to quote accurate all-in rates.
Enter your ZIP code and usage details to see current plans. Request quotes from multiple providers. If your contract has an auto-renewal clause, send your written opt-out notice now.
Compare all-in rates (energy + TDU delivery + demand charges), not just headline energy rates. Pay attention to contract terms, ETF structure, and whether the rate includes a summer escalator.
Most providers can execute a “forward-start” contract that begins the day after your current contract ends — no gap, no holdover exposure.
Under PUCT rules, you can switch providers penalty-free starting 14 days before expiration. If you haven’t signed a new contract yet, this is your last window before the holdover rate takes effect.
The advertised energy rate is not your total cost. A commercial electricity bill has four components, and providers structure them differently. Comparing headline rates without understanding the full picture is how businesses end up on contracts that look cheap but cost more.
Most Texas commercial electricity contracts include automatic rollover terms. If you don’t send written notice of non-renewal within the required window — typically 30–60 days before expiration — your contract renews automatically at terms the provider selects. Auto-renewal does not mean your current rate continues. It means one of two things:
The first scenario is worse than the holdover for one critical reason: you are locked into an overpriced rate with an ETF, so switching costs you money on both sides. The holdover rate is expensive, but you can leave it at any time for free.
Protect yourself at signing: When you sign your next contract, request this language: “Contract shall not auto-renew. Provider shall notify customer in writing at least 90 days before expiration.” Most providers will agree — it is a minor concession during contract negotiation.
PUCT Rule §25.475 establishes specific notice requirements that retail electricity providers must follow before a commercial contract expires. These protections exist because the commission recognized that expired contracts cost Texas businesses millions of dollars per year in avoidable holdover charges.
| Requirement | Details |
|---|---|
| Number of notices | At least three written notices during the final third of the contract term |
| Final notice timing | At least 30 days before expiration (15 days for contracts ≤4 months) |
| Required content | Contract end date, description of renewal offers, the Electricity Facts Label (EFL) for the default holdover product, and instructions for taking action |
| Penalty-free switch window | You can switch providers without an ETF starting 14 days before your contract expiration date |
| After expiration | Provider must serve you on a month-to-month default product you can cancel at any time without a fee |
If your provider did not send the required notices and your account rolled to a holdover rate, you have grounds to file a complaint with the PUCT. In practice, the notices often arrive as generic-looking mail that gets set aside — which is exactly what the provider is counting on.
If your contract has already expired and you are on a month-to-month holdover or default variable rate, the single most important thing to know is: there is no early termination fee. You can switch to a new provider at any time, penalty-free. Your new REP handles the transition through ERCOT behind the scenes — zero interruption to your physical power. Every month you stay on holdover pricing is money lost that cannot be recovered.
To confirm you are on a holdover rate, check your most recent bill for language like “month-to-month,” “holdover,” “variable default,” or “out of contract.” Compare your current per-kWh energy charge to the rates below — if you are paying significantly more than the current market, your contract has likely expired.
Your power stays on, but your account rolls to a month-to-month holdover rate (also called a default variable rate) that typically costs 20–50% more than a competitive fixed contract. There is no early termination fee on holdover — you can switch to a new provider at any time through ERCOT with zero interruption to service.
The spring shoulder months (March–May) and fall (September–November) typically offer the lowest rates. ERCOT demand is lower during mild weather, so providers price forward contracts more aggressively. Avoid locking in during peak summer (June–August) when wholesale prices hit annual highs.
If your contract has expired and you’re on a month-to-month holdover or default variable rate, you can switch at any time with no ETF. If you’re still under contract, review your early termination fee terms — commercial ETFs are typically calculated as remaining months × estimated usage × a per-kWh penalty. You can also switch penalty-free starting 14 days before your contract expiration date.
Start 90–120 days before expiration. Request your historical interval usage data from your current provider, compare quotes from multiple REPs, and execute a forward-start contract that begins the day after your current contract ends — eliminating any holdover exposure.
No. Your new REP handles the transition behind the scenes through ERCOT. Your physical power is never interrupted — the same TDU delivers electricity to your meter regardless of which retail provider you choose. The switch typically takes 1–3 business days.
Under PUCT substantive rule §25.475, your provider must send at least three written expiration notices during the final third of your contract. The final notice must arrive at least 30 days before expiration and must include the Electricity Facts Label (EFL) for the default holdover product. If they didn’t, you can file a complaint with the Public Utility Commission of Texas.
Compare commercial rates for your renewal