Switching electricity companies in Texas is usually straightforward, but whether you’ll pay a cancellation fee depends entirely on the plan you’re currently on. Because Texas has a deregulated electricity market — meaning customers can choose their provider — plans fall into two major categories: no-contract plans and fixed-rate contract plans, each with different rules for ending service.
1. No-Contract Plans (Prepaid & Month-to-Month)
Residential prepaid electricity and true month-to-month plans do not have cancellation fees. These flexible, pay-as-you-go plans allow you to switch providers whenever you want because there’s no long-term agreement involved.
Important note: If you are on a prepaid plan, settle any negative balance or disputed charges before switching. This prevents issues with collections, which could otherwise affect your credit.
2. Fixed-Rate Contract Plans (Plans With ETFs)
Traditional electricity plans often involve contracts of 6, 12, 24 months, or longer. If you end service before the contract ends, the provider may charge an Early Termination Fee (ETF).
Typical Amount: $150 to $295 (varies by provider and contract length).
Where to Check: Always find the exact amount in your Electricity Facts Label (EFL).
3. When You Can Cancel a Contract Without Paying a Fee
Texas regulations allow customers to exit a fixed-rate contract without paying an ETF in several specific situations.
- Moving to a New Home: If you relocate, Texas rules prevent your provider from charging an ETF. Your contract ends automatically, and you’re free to choose a new provider at your new address.
- Switching Near Expiration: You can switch to a new provider up to 14 days before your contract’s official end date without paying fees.
- Unauthorized Price Changes: If your provider changes your rate in a way not permitted under your contract, you may cancel without penalty.
- Satisfaction Guarantees: Some companies offer “satisfaction guarantee” periods (often 30–60 days), allowing you to switch providers without a fee, as long as you are within the stated timeframe.
- Economic Hardship: Some providers may allow you to switch providers without an early termination fee if you provide a hardship-based waiver with clear documentation.
4. Confirm Your Plan’s Cancellation Policy
Always review your Electricity Facts Label (EFL) and Terms of Service (TOS). These documents clearly state whether an ETF applies and the exact amount.