Auto-Renew Texas Electricity Contract: Compare Before It Locks

That friendly renewal email from your retail electric provider (REP) is not a formality. In Texas's competitive market, letting a fixed contract expire without shopping is how many households slide onto a month-to-month variable rate with the same company—often at a price that is hard to predict and usually higher than what you could lock in elsewhere. The fix is not complicated, but it is time-sensitive: compare offers on the all-in price per kilowatt-hour (kWh) before your term ends, not after your bill jumps.

What "auto-renew" actually means in Texas

Colloquially, people say a plan "auto-renews." Under ¹, the more precise default is different: if your fixed contract ends and you take no action, your REP may move you to a month-to-month variable rate plan with that same provider—not a new fixed-price term you never reviewed.

The ² puts it plainly on its bill explainer: when your contract expired, and you do not sign a new contract with your current REP or switch to another, you may be automatically switched to a month-to-month variable rate plan with your current provider.

That is not the same as silently extending your old ¢/kWh for another 12 months. Variable and indexed products can change monthly based on market conditions and provider discretion, as described in ³. A month-to-month default after expiration is the scenario most shoppers should plan around.

Some REPs will offer to renew you into a new fixed contract if you respond to their notice. That is a sales offer, not a guarantee. You still want to compare it against the open market.

Texas retail choice in one minute

Since 2002, many Texas homes served by investor-owned wires companies have been able to choose a REP while the local transmission and distribution utility (TDU)—Oncor, CenterPoint, AEP Texas, TNMP, and others—still delivers power over the poles and wires. ⁴ is the PUCT's official comparison site; switching providers does not interrupt physical service, and a new plan typically takes effect within seven business days after you enroll, per the ¹.

Your bill has two big pieces: delivery (TDU charges everyone in the territory pays) and supply (the REP rate you shop). When you compare renewal offers, you are mainly comparing supply—but the honest number is the total price at your usage, including recurring fees, not a teaser rate at 500 kWh if you actually use 1,200.

The expiration notice—and why the clock matters

If you are on a contract with three or more months left, your REP must send a written Notice of Contract Expiration at least 30 days (or one billing cycle) and no more than 60 days (or two billing cycles) before the end date, according to ¹. The notice is your cue to shop.

The FAQ is explicit about what happens if you ignore it: you should either renew with your current provider or select a new one before your contract ends to avoid being automatically switched to a month-to-month, variable rate plan.

Treat the notice like a calendar alert, not marketing mail:

• Mark the contract end date on your phone.
• Start comparing 30–45 days out, so enrollment completes before the last week.
• Ask your REP what happens on day one after expiration if you do nothing—get the answer in writing if you are unsure, which ³ recommends when contract-end pricing is unclear.

If your REP exits the market suddenly, you may land on a Provider of Last Resort (POLR) until you choose a new plan; the ¹ notes you still will not be without power, and you typically receive 30 days' advance notice in ordinary non-bankruptcy exits.

Why the default month-to-month plan costs more

³ warns that many contracts default to month-to-month if you let them expire without a replacement, and that month-to-month default price will likely be much higher. Variable plans can rise with market spikes; indexed plans move with a published formula. Both can swing month to month.

Fixed-rate plans, by contrast, hold the energy price steady for the contract term except for limited pass-through changes (TDU fees, certain administrative charges, and government-imposed fees beyond the REP's control), as explained on the same page. That stability is what you give up when you drift onto a variable default.

Prepaid plans are a separate lane: they may not bill monthly, can disconnect with little notice if your balance runs low, and generally charge a higher rate than standard postpaid plans, per ³. If you are on prepaid, read balance alerts carefully around renewal season.

Watch for usage-based fees

Many plans charge a minimum usage fee if consumption falls below a threshold. The ¹ notes this charge may not be obvious on the bill summary even though it changes your effective rate. When you compare renewal offers, model the fee at your actual monthly kWh, not a best-case teaser.

Compare before it locks: a practical workflow

Step 1: Know your current all-in price

Before opening comparison sites, call your REP or read your latest bill and ask for your total electric rate per kWh based on 1,000 kWh average monthly usage, excluding taxes and one-time fees. ⁵ starts there so you can compare apples to apples.

The ² helps decode line items—base charge, energy charge, TDU pass-throughs, and rate adjustments tied to variable contracts—so you can reconcile what your REP quoted with what actually printed.

Step 2: Shop the official market, not a single flyer

On ¹, filter by your ZIP and TDU, then sort by price at 1,000 kWh (or your real usage band). Shortlist three to five plans.

For each finalist, confirm:

1. All-in ¢/kWh at your usage—energy, TDU pass-throughs shown on the Electricity Facts Label (EFL), and recurring customer charges.
2. Plan type—fixed, variable, or indexed—and how the price can change.
3. Contract length and early-termination fee (ETF) if you switch before it ends.
4. What happens when the contract expires—the seventh question on the ⁵ list.
5. Minimum usage fees or bill credits that change the effective price.

Step 3: Read the EFL and Terms of Service before you click enroll

Every offer comes with an Electricity Facts Label—a standardized sheet with pricing, fees, and renewable content—and a Terms of Service (TOS) contract outlining length, penalties, and renewal behavior, per the ⁶ and ¹. The EFL is for comparison; the TOS is what you are legally agreeing to.

If a renewal postcard quotes 9.5¢, but the EFL shows a $9.95 monthly charge and a minimum-usage fee, your true cost may be higher than a competing 10.2¢ plan with no monthly fee.

Step 4: Enroll early enough to beat the expiration date

After you pick a plan, contact the REP or enroll online; you will receive a TOS agreement. Review it carefully. You have three business days to cancel without penalty if the TOS includes a penalty, according to the ¹. ERCOT mails a switch confirmation; the change completes within seven business days with no lapse in service.

There is no switching fee for a normal meter read, though you may owe an ETF if you leave an existing contract early—check your current TOS before you break a term to chase a lower rate.

Step 5: Guard against slamming and cramming

Slamming (switching your REP without permission) and cramming (adding unauthorized charges) are illegal. The ¹ advises never sharing account information unless you intend to switch, reading every bill line, and calling the PUCT consumer hotline at 1-888-PUC-TIPS (1-888-782-8477) if a provider cannot prove you authorized a change.

Renew with the same REP vs. switch: how to decide

Staying put can be fine if your renewal offer beats the market at your usage and the new TOS has acceptable ETFs and expiration terms. But loyalty does not automatically mean savings. Variable default rates after expiration are designed to float; they are not a reward for tenure.

Use this filter:

• If the renewal's EFL all-in price is higher than competing fixed offers at your usage after fees, switching before expiration avoids the variable default described in the ¹.
• If you still have months left on a contract, read your TOS before switching early—³ notes contracts of three months or more may have a penalty if you cancel before the period ends.
• If market prices have fallen sharply since you signed, expiration is your natural re-entry point; fixed plans lock the opposite risk—you wait until term end to capture lower prices, as ³ notes for fixed products.

Small-business and landlord wrinkles

Commercial accounts can shop in competitive areas too, but pricing bands, demand charges, and contract minimums differ. Use the business resources linked from Power to Choose and verify whether your account classification triggers different EFL bands.

Landlords switching between tenants should coordinate meter dates and deposits; ³ notes deposits may be required for new customers and are refundable when service ends in good standing.

Beyond Texas: Ohio, Maryland, and regulated states

Texas is the largest deregulated electricity market Americans encounter, but it is not the only place with choice. ⁷ notes that in 23 states and Washington, D.C., you may choose among more than one electric or natural gas provider, and that some households might save about 5 percent on the overall bill by shopping—though offers vary widely. The same article suggests asking your utility about time-of-use pricing if you can shift dishwasher, laundry, and other heavy loads off peak hours.

Ohio and Maryland also have competitive retail markets for many residential and small commercial customers. The comparison steps rhyme with Texas—find the state-authorized comparison site, read the standardized disclosure, confirm ETFs, and ask what happens at expiration—but the documents and default rules differ. If you are in a regulated state without retail choice, you cannot avoid a default renewal by switching REPs; focus on rate plans your utility offers, energy efficiency, and assistance programs.

Checklist: 30 days before your Texas contract ends

• Pull your current all-in ¢/kWh at 1,000 kWh (or your real usage).
• List expiration date and ETF from your TOS.
• Compare at least three plans on ¹ at your usage band.
• Read each finalist's EFL and TOS, especially contract-end pricing.
• Enroll at least two weeks before expiration so the switch clears within seven business days.
• Watch for ERCOT's confirmation mail; you have three business days to cancel a new enrollment if needed.
• File away the Notice of Contract Expiration with your chosen plan confirmation.

Electricity is not a set-and-forget utility in competitive markets. The "auto" in auto-renew is really auto-default to a variable month-to-month plan unless you choose otherwise. Compare while you still have leverage—once the new month-to-month rate prints on your bill, you are shopping from behind.