When a Texas commercial electricity contract expires without a new contract in place, your account automatically reverts to your current provider's holdover rate. This is not a promotional rate, a renewal rate, or a negotiated rate. It's the provider's default month-to-month pricing — and it runs 20–40% above what a competitive fixed contract would cost for the same account at the same time.
PUCT substantive rule §25.475 requires retail electricity providers to send written expiration notices 30–45 days before a fixed-rate commercial contract ends. Most business owners receive the notice, set it aside, and intend to deal with it later. Later becomes the holdover rate. On a Texas commercial account consuming 60,000 kWh per month, a 2.0¢/kWh holdover premium costs $1,200 per month — $14,400 per year — from a missed 90-day window.
This guide covers the Texas commercial electricity contract renewal process from start to finish: what your contract actually says, how to read the auto-renewal clause, what the 90-day procurement timeline looks like, and how a competitive reverse auction at renewal consistently outperforms accepting your current provider's offer.
Your expiration date appears in two places: your Electricity Facts Label (EFL), which your provider was required to give you when you signed, and your monthly electricity bill, which typically lists the contract end date in the account information section.
If you can't locate either, call your provider's commercial accounts department and ask for your contract end date and your current supply rate. They are required to provide this information. Ask also whether your contract has an auto-renewal clause and what the rollover rate would be if you take no action.
The Electricity Facts Label is the legally required disclosure document that every Texas retail electricity provider must provide for every commercial plan. It discloses your supply rate, contract term, early termination fee structure, and auto-renewal terms. If you signed a contract without receiving an EFL, your provider violated PUCT rules — contact the Texas Public Utility Commission for resolution.
Once you have your expiration date, count back 90 days. That date is when your procurement process should begin. If that date has already passed, start today.
Most Texas commercial electricity contracts include an auto-renewal provision that activates if neither party terminates the contract within a specified notice window before expiration. The typical structure: the contract requires 30–60 days' written notice of non-renewal, sent before the contract expires. If you miss that window, the contract renews automatically — sometimes at a new fixed rate the provider sets, sometimes at a variable holdover rate, depending on the specific contract language.
The auto-renewal rate is almost never the best available market rate. It is the provider's default pricing for accounts that didn't go out to bid. Providers set these rates knowing most customers won't switch over a modest increase — and that the friction of switching creates a captive renewal base.
For a detailed breakdown of exactly how auto-renewal clauses are structured and what the specific language to look for in your contract is, see our guide on how Texas commercial electricity contracts auto-renew.
The dollar cost of an auto-renewal at a passive rate depends on your usage. For context at common account sizes, at a 1.5¢/kWh above-market auto-renewal rate:
20,000 kWh/month account: $300/month over-charge, $7,200 over 24 months.
60,000 kWh/month account: $900/month over-charge, $21,600 over 24 months.
150,000 kWh/month account: $2,250/month over-charge, $54,000 over 24 months.
These are not hypothetical numbers — they are what Texas commercial accounts pay every month they sit on a passive renewal or holdover rate without going to competitive bid.
The 90-day window before contract expiration is the standard recommended procurement timeline for Texas commercial accounts. Here's why each phase matters:
Days 90–60 before expiration: Audit and auction. Pull your last 12 months of bills. Identify your current all-in rate, your current supply rate, your usage pattern by month, and your peak demand level. Submit this to a PUCT-licensed broker. The broker pulls your interval data from your TDU (Oncor, CenterPoint, or AEP Texas depending on your location), identifies your meter classification, and submits your load profile to 25+ licensed Texas providers simultaneously. You receive competitive bids within 24–48 hours.
Days 60–30 before expiration: Evaluate and execute. Compare every bid side by side — supply rate, contract term, demand charge structure, early termination fee, auto-renewal terms. Select the winning bid. Sign the contract electronically (typically DocuSign). Submit enrollment to your TDU. Most Texas commercial enrollments process within 7–14 business days.
Days 30–0 before expiration: Confirm transition. Verify the new contract's start date aligns with your current contract's end date. Confirm with your TDU that enrollment is processing. Review the final contract terms. On the transition date, the new provider begins supplying your account — no service interruption, no meter change, no operational impact of any kind.
Starting at 90 days gives you enough time to run a competitive auction, evaluate multiple bids, negotiate if needed, execute the contract, complete TDU enrollment, and confirm the transition before your current contract ends. Starting at 30 days compresses the auction and enrollment timeline dangerously. Starting after expiration means you're on the holdover rate while the procurement runs.
A renewal means your current provider supplies your account for the next contract term — typically at a new rate negotiated or offered by that provider. Switching means a different provider supplies your account at a competitively bid rate.
In practice, the distinction matters less than whether you ran a competitive auction. A renewal that came through a competitive auction where your current provider won by submitting the lowest bid is a better outcome than a switch to a new provider at a mediocre rate. The goal is the best rate from the best contract structure — not switching for its own sake.
That said, providers consistently offer better pricing to new accounts than to renewing accounts. The competitive pressure of an auction forces your current provider to match market rates if they want to retain your business. Without that pressure, renewal rates reflect what the provider believes you'll accept without shopping.
The most common and costly mistake in Texas commercial electricity procurement is accepting the current provider's renewal offer without running a competitive auction. The second most costly is waiting until the contract has expired before starting the process.
When a Texas commercial account goes through a reverse auction at renewal, the rate spread between the highest and lowest bid from qualified providers typically runs 1.0–2.0¢/kWh for accounts consuming 20,000–200,000 kWh per month. The winning bid is almost always below what the current provider offered as a direct renewal.
The reason is straightforward: in the direct renewal context, the provider knows you're their existing customer and estimates your switching cost. In the competitive auction context, the provider knows they're competing against 24 other bids and will lose the account if they price too high. The same provider that quoted 9.2¢/kWh in a direct renewal conversation will bid 8.0¢/kWh in a blind auction for the same account.
For accounts in Dallas, Houston, and Fort Worth, the competitive auction at renewal consistently produces lower rates than direct renewal for the same reason it does the first time: competition works when it's actually run.
If your contract has already expired and you're on a holdover or variable rate, the remediation process is the same as a new procurement — with one additional consideration. You need to check whether your current contract has an early termination fee that applies even on a holdover. Most contracts do not assess ETFs once the original term has expired and the account is on a month-to-month holdover, but verify this before assuming you can switch penalty-free.
Once confirmed, run a reverse auction immediately. The holdover rate you're currently paying will almost certainly be higher than a new fixed contract rate. Every month on the holdover rate while delaying the auction is money lost that cannot be recovered.
If your account has been on a holdover rate for multiple months, request billing records for the holdover period and compare against current competitive market rates. If the holdover rate was materially above the market rate available at that time, you may have grounds to file a complaint with the PUCT. The Commission investigates overcharges on holdover rates where the provider failed to send required expiration notices.
Contract renewal timing and structure aren't identical across all Texas commercial accounts. Different industries have specific considerations worth addressing before signing any renewal.
Restaurants and food service operations should lock in fixed-rate contracts before summer due to the seasonal load intensity. A Texas restaurant that renews in July is signing at the worst forward pricing window of the year. See our guide on Texas restaurant electricity procurement for timing specifics.
Churches and religious organizations renewing in Texas should verify their sales tax exemption transfers to the new contract. The exemption doesn't transfer automatically — you must file Form 01-339 with each new provider at every contract switch. Failing to do so costs 6–8% permanently until corrected.
Commercial real estate operators with multiple properties should align contract expiration dates across their portfolio at renewal rather than letting staggered expirations compound. A portfolio auction at unified renewal dates produces better pricing than individual property renewals and reduces administrative overhead. See our guide on Texas CRE electricity cost recovery.
Manufacturing operations with demand above 100 kW should evaluate demand charge riders in renewal contracts specifically — not just supply rates. The demand component of the total bill is large enough that an unfavorable demand rider can offset a favorable supply rate. Our guide on Texas commercial demand charges covers this in detail.
PUCT rule §25.475 requires retail electricity providers to send expiration notices beginning at least 30 days before the contract end date for fixed-rate contracts longer than four months. For contracts longer than 12 months, providers must send notices in the final third of the contract term. If you didn't receive required notices and your account rolled to a holdover rate, you can file a complaint with the PUCT.
Yes. Most Texas REPs offer forward-start contracts — you execute the contract now with an effective date matching your current contract's expiration. This is the preferred approach: you capture current market pricing, eliminate holdover risk, and the transition is seamless. The forward-start period is typically up to 90 days, so you can lock a new contract today for a contract that starts in three months.
In most cases, new customer rates and competitively bid renewal rates are lower than direct renewal rates offered to existing customers. Providers price direct renewals assuming some portion of customers won't shop alternatives. A competitive auction eliminates that assumption by forcing every provider to price against 24+ competitors simultaneously.
Pull your most recent bill and identify your supply rate per kWh — this is the energy charge, separate from delivery charges. If your all-in rate (supply + delivery) exceeds 13¢/kWh and your contract is more than 12 months old, submit your bill for a free audit. We'll pull current market pricing for your account and tell you within 24 hours what a competitive auction would produce.
Every week a Texas commercial account sits on an above-market contract or holdover rate is money that doesn't come back. The auction takes 24 hours. The contract takes minutes to sign. The transition is seamless.
Contact EnergyBrokerTX for a free Texas commercial electricity contract renewal audit. Send your current bill and we'll identify your expiration date, run a competitive auction with 25+ licensed providers, and present every bid side by side. PUCT License #BR260054. Serving Dallas, Houston, Fort Worth, Frisco, and all of Texas.
