Early termination fees—and when you can switch without one

What is an electricity early termination fee?

An early termination fee, or ETF, is a charge for leaving a term electricity contract before its expiration date. Fixed-term plans often have one; month-to-month plans cannot. Your Electricity Facts Label, or EFL, must say whether the plan has a termination fee and how much it is.

The fee is the contract side of a fixed rate. A provider estimates how much electricity its customers will need and buys or hedges power ahead of time so a wholesale-price spike does not change the contracted price. If a customer leaves early, the provider may be left with costs it expected the contract to cover. The ETF transfers some of that early-exit risk back to the customer.

The rate, contract length, and fee belong in the same comparison. A slightly lower price may not be worth a long term with an expensive exit.

Common fee structures include:

• A flat fee: one amount applies whether you leave in month two or month eleven.
• A fee per remaining month: the charge falls as the contract gets closer to expiration.
• No fee: month-to-month products cannot carry one, and some term offers choose not to charge one.

The EFL shows whether a fee exists and its amount or formula. The Terms of Service explains how termination works and when an exception applies.

When can you cancel without paying an ETF?

Texas customer-protection rules provide penalty-free exits when you move away from the contracted service address and during the final 14 days before the contract expires. They also give you a separate 14-day exit period after notice of an unfavorable change to the contract's terms.

These rights do not erase electricity you already used or another valid balance on the account. They prevent the provider from adding the early termination penalty in the covered situation.

The details matter. A moving waiver is tied to leaving the service location, not simply wanting a different provider at the same address. The expiration protection is tied to when the switch takes effect. A contract-change exit has its own deadline stated in the notice.

How does the moving waiver work?

If you move away from the address named in the electricity contract, you do not have to keep that contract at the next address and the provider cannot assess an ETF for the relocation when you meet the rule's requirements. Give the provider a forwarding address and, if it asks, reasonable evidence that you no longer occupy the old premises.

Texas rules do not prescribe one universal proof document. Ask the provider what it accepts before closing the account. A lease-end document, closing record, or evidence of the new residence may help establish the move, but the provider's request must be reasonable. Keep the request, the document you send, and the provider's confirmation.

Use the word move or relocation when contacting the provider. Tell it the final service date, forwarding address, and that you are requesting the relocation waiver. Do not describe an ordinary same-address provider switch as a move.

You are not required to transfer the old plan to the new home. You may choose a new plan there, including with a different provider, after checking which offers serve the new address.

How does the final 14-day window work?

You can switch without a termination penalty when the switch takes effect no earlier than 14 days before the expiration date stated in the contract-expiration notice. You may compare plans or enroll earlier; schedule the actual service change inside the protected window.

Use the notice's date rather than counting months from the signup day. A contract may end on a calendar date or on the first meter read on or after a stated date. The expiration notice must explain which date starts your 14-day protection.

For a fixed contract longer than four months, the provider's final expiration notice must arrive at least 30 days before the end date. For a fixed contract of four months or less, the final notice must arrive at least 15 days before. Check email and paper mail for “Contract Expiration Notice,” then save it until the switch is complete.

If you take no action, your provider must continue service on a month-to-month default renewal product. You will not lose power merely because the fixed term ended, and you can leave that default product without a termination fee. Its price may change between billing cycles, so continued service is not the same as a competitive renewal.

Where can you find your fee and contract end date?

Start with the EFL. Its disclosure chart must answer whether the plan has a termination fee and, if so, how much. Then read the Terms of Service for the termination process, moving protection, and other conditions.

For the date, check:

• the contract-expiration notice;
• the contract or provider account portal;
• a recent bill, if the provider displays it there; or
• the provider's customer-service team.

Texas rules require the contract start and end dates to be available to you on request. Ask the provider to confirm both the expiration date and the last date on which an ETF could apply. If the contract uses a meter-read date, ask it to explain the protected switch date in plain language.

Save the EFL version tied to your plan. A current marketing EFL with the same plan name may have a different fee from the contract you actually signed.

When is paying the ETF worth it?

Paying an ETF can make financial sense when the total savings on a new plan exceed the fee before your old contract would have ended. Compare estimated total bills at the same usage, not two advertised cents-per-kWh figures.

The useful formula is:

monthly savings × months remaining − ETF = net savings

The same example has a break-even point of about four months: $150 divided by $38 in monthly savings. With five months left, the projected benefit is $40. With only three months left, paying the fee would lose money.

Stress-test the answer. A bill credit on the new plan may disappear in a low-usage month, and a free-nights plan may not save what its headline implies. Compare a low, typical, and high month before treating the projected savings as dependable. See how special pricing behaves across usage levels.

Also ask whether waiting has value. If the final 14-day window is close, the small savings from switching immediately may be less than the ETF you can avoid by scheduling the change later.

How do you switch without creating a service problem?

At the same address, enroll with the new provider and choose the switch date. Do not order a disconnection from the old provider just to change companies; a disconnection is a different transaction and can interrupt service.

Before submitting the switch:

1. Check whether you are still under a fixed contract and what ETF, if any, applies.
2. Compare the new plan's EFL.
3. If you are using the final 14-day window or a contract-change exit, schedule the service change inside that protected period. On month-to-month service, you can switch without waiting for one.
4. Review the old provider's final bill for an unexpected ETF.

If you are moving, contact the current provider to close service at the old address and invoke the relocation waiver. Set up service at the new address as a move-in rather than a same-address switch. The waiver right comes from Texas rules and applies no matter which provider you choose.

Early termination fee FAQ

Do I owe an electricity early termination fee if I move?

No, not when you move away from the service address and follow the relocation requirements. Give the provider a forwarding address and, if it asks, reasonable evidence that you no longer occupy that address. Transferring the same contract to the new home is not required by the Texas rule.

How do I find my electricity contract end date?

Check the contract-expiration notice, your provider account, or ask the provider directly. Texas rules require the start and end dates to be available on request. Use the date in the notice when scheduling a switch during the final 14-day window.

Can an electricity provider waive my termination fee?

Yes. A provider may offer a courtesy waiver or another arrangement beyond the rights Texas rules require, but get any promise in writing before you switch. Without a required waiver or written exception, assume the disclosed fee applies.

What if my provider changes my contract during the term?

For an unfavorable change to contract terms, the provider must give advance notice and a 14-day period to terminate without a penalty. Some fixed-plan price changes expressly allowed by Texas rules, such as specified utility or regulatory pass-through charges, are different and do not create that notice-based exit right.

Can I cancel a month-to-month electricity plan without a fee?

Yes. Texas rules do not allow a termination fee or penalty on a month-to-month electricity contract. Check for any separate outstanding balance, move-in charge, or other valid account charge, because those are not early termination fees.

Sources and related reading

This guide is based on 16 Texas Administrative Code §25.475, including the relocation rule, expiration notices, the final 14-day protection, contract-change notices, and required EFL disclosures.

Reviewed July 22, 2026. This guide provides general educational information, not legal advice. Rules and plan terms can change; confirm current PUCT materials and your plan documents for your situation.

Continue with choosing an electricity contract length, how to switch electricity providers, how to read an Electricity Facts Label, bill-credit and free-nights plans, or set up electricity at a new address.