Your Electricity Bill Jumped Because Nobody Told You Your Contract Ended

You open your electricity bill and your stomach drops. It’s a lot higher than last month. Nothing changed at your house. Same thermostat, same family, same routine. So what happened?

Here’s one answer nobody tells you about: your fixed-rate contract probably ended, and you got rolled onto a different rate without ever agreeing to it. In Texas, this is called falling into a “holdover” or “month-to-month” rate. It just means your old locked-in price expired, and your provider switched you to whatever rate they charge people who aren’t under a set contract. That rate can be much higher, and it can move every single month.

Normally, your electricity company is required to warn you before this happens. They’re supposed to send you a notice weeks ahead of time, telling you the contract is about to expire and laying out your options. But sometimes that notice never shows up. Maybe it went to a spam folder. Maybe it was never sent at all.

Here’s the part almost nobody knows: if your provider skipped that notice, Texas rules say they are not allowed to just quietly move you to a higher rate. They have to keep charging you your old, locked-in price until they actually notify you properly, or until you pick a new plan yourself.

This article is not legal advice. It’s a plain-language guide to a rule that’s sitting in Texas’s public utility code and rarely gets explained to regular people. It walks you through how to check your own bill and your own paperwork, and what to do next if you think this happened to you.

The rule almost nobody has heard of

This comes straight from the Public Utility Commission of Texas’s own rulebook, 16 TAC § 25.475(e)(1)(C):

“If a REP does not provide the required notice of the expiration of a customer’s fixed rate contract and the customer does not select another retail electric product before expiration of the fixed rate contract term, the REP must continue serving the customer under the terms of the fixed rate contract until the REP provides notice in accordance with applicable requirements of subsection (e)(1)(A)(i) or (ii), or until the customer selects another retail electric product.”

(“REP” is the industry term for your electricity company — it stands for Retail Electric Provider.)

In plain words: if they forgot to warn you, they don’t get to charge you the higher rate yet. They owe you the old price until they actually send that notice, or until you choose a new plan on your own.

This isn’t just a PUCT rule sitting off to the side. It comes straight from Texas state law too. Texas Utilities Code § 39.112(j) says almost the same thing, in almost the same words:

“If a retail electric provider does not provide notice of the expiration of a customer’s contract with the provider in accordance with this section and the customer does not select another retail electric product before the expiration of the customer’s contract term with the provider, the retail electric provider must continue to serve the customer under the pricing terms of the fixed rate product contract until: (1) the provider provides notice of the expiration of the contract in accordance with this section; or (2) the customer selects another retail electric product.”

These two aren’t competing rules. The statute is the actual law passed by the Texas Legislature. The PUCT rule is how the Public Utility Commission carries that law out day to day. Same requirement, stated twice — once by lawmakers, once by the regulator that enforces it.

If your provider failed to send the required notice, and you never picked a new plan yourself, the rule says they owed you your old fixed rate the whole time. Not a “sorry about that.” The old rate.

If you suspect this is you, this is the moment to check your exposure before you do anything else. Our Texas Holdover Rate Calculator walks you through comparing what you were charged against what your contract said you should have paid.

How to check — do this now

You don’t need a lawyer to check the basics. Grab your last several bills and any old emails or letters from your electricity company, and work through this list.

1. Find the contract end date on your bill. Texas law requires providers to print this. Texas Utilities Code § 39.112(g) says: “A retail electric provider shall include on each billing statement, in boldfaced and underlined text, the end date of the fixed rate product.” Look for bold, underlined text on a recent bill — that date is legally required to be there. If you can’t find it, call your provider and ask directly.

2. Compare that end date to when your rate went up. Did your bill jump around the same time the contract was supposed to expire? That’s the pattern to look for.

3. Dig up the expiration notice. Providers are required to send this before your contract ends — check your email (including spam and promotions folders), your mail, and your online account message center. Look for anything with words like “contract expiring,” “renewal,” or “rate change.”

4. Check the date on that notice against your contract’s actual end date. If you can’t find a notice at all — not in your inbox, not in your mailbox, not in your online account — that’s the key fact. No notice means the notice-failure rule may apply to you.

5. Gather every bill since the contract expired. You’ll want the billing statements from the expiration date forward, showing exactly what rate you were charged each month, so you (or the PUCT) can compare it against your old contracted rate.

6. Check your account for any plan you might have picked. The rule only protects you if you did not choose a new plan yourself. If you clicked through an email and selected a new rate, that resets things — you picked, so the holdover protection doesn’t apply from that point forward.

None of this requires special tools. It’s mostly patient reading of your own bills and inbox.

If the notice is missing, here’s what to do

If you’ve gone through that list and you genuinely can’t find a notice, don’t assume anything is guaranteed. What it means is: you may have a legitimate question worth asking, formally.

Start with your provider. Contact your electricity company directly, point to the dates, and ask them to show you when the expiration notice was sent and to whom. Ask them to explain, in writing, why your rate changed and on what date. Keep records of everything — names, dates, reference numbers, and copies of any responses.

If that doesn’t resolve it, you can file a complaint with the Public Utility Commission of Texas. The PUCT has a formal complaint process under 16 TAC § 25.485 specifically for disputes like this between customers and their electric providers. The commission is set up to investigate whether a provider followed the notice rules, and it’s a much stronger route than arguing on the phone alone.

To be clear: this article can’t tell you whether you’re owed anything, and it isn’t promising a refund. Whether the rule applies depends on your specific contract, your specific notices (or lack of them), and the specific dates involved. What it can tell you is that the process to find out exists, and how to start it.

The 14-day rule — and a mistake you’ll see elsewhere

Here’s a detail that a lot of sites online get backwards. Many articles claim you have some number of days after your contract expires to switch penalty-free. That’s not what the rule says.

The actual rule, 16 TAC § 25.475(e)(2)(C)(ii), requires your notice to include:

“a statement in bold lettering no smaller than 12 point font that no termination penalty must apply to residential and small commercial customers 14 days prior to the date stated as the expiration date in the notice.”

Read that carefully: the penalty-free window starts 14 days before your contract’s expiration date, not after. If your notice properly told you this, you already had the right to shop for a new plan and switch, penalty-free, in the two weeks leading up to expiration — before your rate ever changed.

No exit fee once you’ve rolled over — but the rate isn’t locked

Once your fixed contract lapses and you land on the default month-to-month product, there’s good news: you’re free to leave whenever you want, with no exit penalty.

16 TAC § 25.475(b)(7) defines a month-to-month contract this way: “A contract with a term of 31 days or less. A month-to-month contract may not contain a termination fee or penalty.”

And 16 TAC § 25.475(e)(2)(A) spells out what happens if you never picked a new plan after your final notice: “the REP must serve the customer pursuant to a default renewal product that is a month-to-month product that the customer may cancel at any time without a fee.”

So if you’re on a holdover rate right now, you can shop for a new plan and switch today, with no cancellation fee standing in your way.

One important catch, though: that same rule continues, “The month-to-month product price may vary between billing cycles based on clear terms designed to be easily understood by the average customer.” In other words, there’s no exit fee, but the holdover rate itself is not locked in place. It can move from one billing cycle to the next. Don’t assume that because you’re free to leave anytime, the price is staying put while you decide — it may not be. That’s one more reason to check sooner rather than later.

You can compare current Texas electricity plans here and switch without a penalty. We earn a commission if you switch through this link, at no extra cost to you. It does not affect what we recommend.

The “180 days” you may have heard about — stated correctly

If you’ve read anything about billing disputes in Texas, you may have come across a “180-day” rule. It’s real, but it’s often described wrong, and it’s easy to walk away thinking your time is running out. It isn’t — at least not for the situation this article is about.

The 180-day limit, under 16 TAC § 25.480(e)(1), restricts how far back a provider can bill you for its own past mistake when it undercharged you. That’s a cap on what they can come after you for. It has nothing to do with your ability to get money back when you were overcharged.

For overbilling — which is what a missed expiration notice usually causes, since you end up paying more than your contract allowed — the rule is different and there’s no time cap. 16 TAC § 25.480(d)(1) says plainly: “The correction shall be made for the entire period of the overbilling.” Not the last 180 days. The entire period. And § 25.480(f) doesn’t set any deadline for filing that kind of dispute either.

The honest way to think about this: if a notice failure caused you to overpay, the whole stretch of time you were overpaying is potentially recoverable — not just the last six months. That’s a stronger position than the 180-day version implies, not a weaker one.

What this could be costing you right now

Every month you stay on an unnoticed holdover rate is another month at a price you may never have agreed to. Electricity bills in Texas swing hard with the weather, so a rate gap that looks small in April can turn into real money by August.

The fastest way to see your actual exposure is to run your numbers. Our Texas Holdover Rate Calculator compares your old contracted rate against what you’ve actually been billed since your contract’s expiration date, so you can see the gap in dollars, not guesswork — and decide whether it’s worth raising with your provider or the PUCT.

And if you’re ready to move to a new plan today, penalty-free, you can start comparing plans here. We earn a commission if you switch through this link, at no extra cost to you. It does not affect what we recommend.

ChooseMyPower is commission-blind: we’re ranked by your bill, not our commission. This article exists because almost nobody explains this rule to regular Texans, and it should be easy to check.