Early Termination Fees in Texas Electricity Contracts
Every fixed-term electricity plan in Texas carries a lock-in mechanism: leave before the term ends and the provider can charge an early termination fee (ETF). It's not fine print in the pejorative sense — the fee and its structure are required disclosures on the Electricity Facts Label — but it is the single number that decides whether a mid-contract switch makes financial sense. This page covers how the fees are structured, when they legally can't be charged, and how to do the break-even arithmetic.
Want the answer computed for you? Use the break-even calculator — it compares your current bill against today's plans at your usage and shows the math.
The two common fee structures
Flat fees are one fixed amount no matter when you leave — $150 is the most common figure on 12-month plans, with $175–$395 appearing on 24- and 36-month terms. Leaving in month 2 costs the same as leaving in month 11, which makes the break-even math straightforward but penalizes late-term exits disproportionately.
Per-month-remaining feesscale with time left — $20 × months remaining is typical. These are fairer late in the term: with two months left the fee is $40, not $150. When comparing two otherwise similar plans, a per-month structure is worth a small premium because it keeps your exit cheap in exactly the months you're most likely to want out.
The moving exemption
Texas customer-protection rules (16 TAC §25.475) bar a provider from collecting an early termination fee when you end the contract because you're moving, as long as you give notice and reasonable evidence — a forwarding address or proof of new service is generally sufficient. If you're relocating, don't let a quoted fee stop you from ending service, and dispute any fee that appears on a final bill after a documented move.
The break-even arithmetic
The fee is a certain, one-time cost; the savings from a cheaper plan are recurring but only count until your current contract would have ended anyway. So the comparison is:
(current monthly bill − new plan monthly bill) × months remaining − fee
Positive → switching pays for itself before the contract expires. Negative → stay and set a reminder for the end of your term. Use a real bill total (not the advertised rate) for the current side so delivery charges and credits are included, and an all-in estimate for the new side — that's what our comparison tool estimates at your usage.
Frequently asked questions
What is an early termination fee?
A one-time charge your retail electric provider can collect if you end a fixed-term contract before its expiration date while staying at the same address. It compensates the provider for the energy it purchased in advance to cover your expected usage. The amount and structure must be disclosed on the plan's Electricity Facts Label and in the Terms of Service before you sign up.
What fee structures do Texas providers use?
Two are common. Flat: one fixed amount regardless of timing — $150 is typical, and $175–$395 appears on longer terms. Per-month-remaining: a smaller amount multiplied by the months left, such as $20 per remaining month, so leaving early in the term costs more than leaving near the end. A few plans use tiered schedules that step down at set milestones.
Can the fee be charged if I move?
No. Texas customer-protection rules (16 TAC §25.475) prohibit collecting an early termination fee from a customer who terminates service because they move to another premises, provided the customer gives notice and reasonable evidence of the move. Keep documentation — a forwarding address or new-service confirmation is usually enough.
Is paying the fee ever worth it?
Sometimes. If market rates have dropped well below what you locked in, the savings over your remaining months can exceed the fee. The comparison is one line of arithmetic: monthly savings × months remaining − fee. Positive means switching pays off before your contract would have ended anyway; negative means stay.
Does TrueBill show cancellation fees before I pick a plan?
Yes — when the fee is parsed from the plan's EFL or listing it appears on the plan card's fine print, in the gotcha flags, and on provider pages. We also flag long contracts where a fee is likely so you can check the EFL before committing.