Your Commercial Electricity Contract Renews Itself Unless You Act: The Notice Window
Most Texas commercial electricity contracts auto-renew or shift to a month-to-month holdover rate unless you send written notice inside a specific window before your end date, commonly 30 to 90 days out but never assume. Start shopping 12 to 18 months ahead so you have leverage before that window closes.
Say a Texas warehouse account uses 33,000 kWh a month and its contract quietly auto-renewed at 11.5 cents per kWh, running $3,795 a month in energy charges. If that same load were rebid competitively at 8 cents per kWh, it would run $2,640 a month, a $1,155 monthly gap that adds up to $13,860 a year. Example numbers to show the math, not a live quote. The business never made a decision to pay that gap. The contract just renewed itself while nobody was watching the calendar.
How Auto-Renewal Works in Texas Commercial Supply Contracts
Every commercial electricity contract in ERCOT territory has an end date, and almost none of them just stop on that date. Buried in the boilerplate is a renewal or evergreen clause that tells the supplier what to do if you don't act: roll the account into another fixed term at a new rate the supplier sets, or shift it to a month-to-month variable rate until you sign something new. Some contracts auto-renew for the same length as the original term. Others convert straight to holdover pricing. The clause is legal, it's standard across Texas suppliers, and it's written to protect the supplier's revenue, not your budget.
The Renewal Letter Is a Sales Pitch, Not a Deadline
A letter or email shows up from your current supplier with a new rate and a signature line, usually somewhere in the final months of your term. Business owners treat that letter like a deadline: sign by this date or something bad happens. That's exactly what the supplier wants you to think. The letter is a one-company quote sent by the party that benefits most from you not shopping around. It didn't come from ERCOT and it isn't the only rate available to your account. Treat it as one bid among several, not the final word on your electricity cost.
The Holdover Trap and the 12-to-18 Month Shopping Window
If the notice window in your contract passes with no action, most Texas commercial agreements do one of two things. They auto-renew you into another fixed term at whatever rate the supplier listed in that letter, no negotiation, no competing bids. Or they drop you onto a month-to-month holdover rate, a variable price the supplier can adjust as the market moves, usually priced above what a competitively bid fixed contract would cost. On an account paying several thousand dollars a month in supply charges, that gap compounds fast, month after month, with no fixed-price protection.
The fix isn't waiting for the renewal letter and reacting fast. It's starting the shopping process 12 to 18 months before your contract ends. That gives you time to pull interval usage data from your TDU, whether that's Oncor, CenterPoint, AEP Texas, or TNMP depending on your service address, get that load profile in front of multiple ERCOT suppliers, compare real bids side by side, and still have buffer room to negotiate before the notice deadline forces your hand. A broker can help you plan this window well in advance, because a rushed 30-day scramble against a holdover deadline is a negotiation you've already lost.
- 18 months before contract end: Pull your usage history and confirm your ESI ID(s), TDU territory, and current contract terms.
- 12 months before contract end: Start collecting competitive bids from ERCOT-registered suppliers, not just your incumbent.
- 6 months before contract end: Lock in a new contract if the pricing looks favorable. Most new terms can start before the old one technically expires.
- 90 days before contract end: Confirm the exact notice deadline in your current contract's renewal clause, in writing, not from memory.
- 30 days before contract end: If you haven't signed anything yet, this is damage control, not strategy. Get bids immediately to avoid rolling onto a holdover rate.
Never assume your notice window is 30, 60, or 90 days. That number is set contract-by-contract, sometimes clause-by-clause within the same supplier's portfolio. Read your current agreement's renewal and termination section yourself, or ask a broker for guidance interpreting it, before you build a calendar around a guess.
The move that actually saves money: start collecting competitive bids 12 to 18 months out, before the supplier's renewal letter ever lands. A business shopping from a position of time, not urgency, gets better pricing and better contract terms than one racing a 30-day notice clock.
Don't wait for a renewal letter to tell you what happens next. Get a bid comparison built around your actual contract end date, ESI ID, and usage history, so you know your options before the notice window closes.
Get My QuoteFrequently asked questions
A holdover rate is what the supplier charges once your fixed term ends without a new signed agreement. It's typically a variable, month-to-month price set above your expiring fixed rate, and the supplier can move it as the market shifts.
In most cases, 12 to 18 months before the contract end date is the right window. That gives you time to pull usage history, build a load profile, and get competing bids from multiple ERCOT suppliers before the account is exposed to holdover pricing.
No. Notice windows vary by supplier and by contract, commonly 30 to 90 days before the end date, sometimes longer for larger IDR-metered accounts. Never assume a number without reading your actual contract's renewal and termination clause.
The contract typically either auto-renews for another term at the supplier's stated renewal rate with no negotiation, or rolls to a variable month-to-month holdover rate. Either way, you lose the leverage of a competitive bid until the next window opens.
We recommend against it. A renewal letter is a one-supplier quote, not a market check. Getting competing bids from multiple ERCOT suppliers before you sign anything is the only way to know whether that rate is fair.