Any product or company names, marks, or logos shown on this page are the property of their respective owners. Compare Power is an unaffiliated, independent marketplace.Get unbiased, accurate information backed by our commitment to editorial integrity.
Early Termination Fees
Hey there! If you’re reading this, chances are you’re staring down Early Termination Fees (ETFs) for one of the following reasons:
You’re planning to move and need to get out of your Texas electricity contract pronto.
You’re on the hunt for a more affordable energy plan.
Or you’re regretting signing up for your current electricity contract and want to make a change.
Lucky for you, we’ve got your back. Below, you’ll find out how ETFs work, how to avoid them, and how to switch and save, even if it means paying for an ETF.
Key Takeaways
You don’t have to pay an ETF if you are moving or are facing economic hardship.
The Public Utility Commission of Texas (PUCT) limits the amount an electricity company can charge you for terminating your contract early.
You can save money, even if you pay an ETF, by switching to a better electricity plan for your home.
What Exactly Are Early Termination Fees?
Early Termination Fees (ETFs) are, drumroll please, fees you are charged if you want to terminate your electricity contract early.
Any time you sign up for an electricity contract, you’ll see an ETF noted on the Electricity Facts Label (EFL).
These fees come in a few different varieties and can range from $20 per month remaining on your contract to anywhere in the ballpark of $250.
Why do they exist?
To put it simply, ETFs exist because electricity companies buy the electricity for your home before you even sign up for service.
Since they’ve already paid for the electricity, they put an ETF in place to protect that investment.
If you were to sign up for a plan and then cancel a month in, the electricity company would be stuck with that extra electricity and no way to make money.
Ultimately, business is business, and the electricity companies want to protect their money, even if it means taking yours.
Different Types of ETFs
As we mentioned earlier, there are two different kinds of ETFs you’ll see:
Flat Fees: This is a set fee, usually between $100-250, charged no matter when you cancel your contract.
Variable/Prorated Fees: These fees decrease as you get further into your contract. The later you cancel, the less you pay. Most are $20 per month remaining on your contract.
Limits on ETFs to Protect You
While ETFs are in place to protect businesses, the Public Utility Commission of Texas (PUCT) has rules to prevent excessive fees. Here’s the cap:
For residential customers: $20 or 10% of the remaining contract value, whichever is higher.
These limits keep providers from locking you into a contract with steep ETFs.
When Are You Not Charged an ETF?
Under PUCT §25.475, you’re off the hook for ETFs if:
You’re facing extreme financial struggles and can’t afford your bills.
You’re permanently moving away from your service address.
There’s been a death in the family.
The provider fails to uphold the contract terms.
Avoiding ETFs
If you’re moving out of your Texas home, you don’t have to pay these ETFs. Just call your provider to cancel and give them proof of your move.
You’re exempt if you face financial hardship or issues with your provider’s service. In these cases, you can contact your provider for more details.
And if you want to switch at the end of your contract, you have a 14-day window to make that change without being charged.
Electricity Companies that Will Cover Your Early Termination Fee
When you switch to Rhythm Energy, the company will cover up to $150 in early termination fees from your previous electricity provider.
Plus, they offer a 30-day Easy Energy Promise, which means you’ve got one month to try Rhythm out or leave early without a penalty.
How can you get reimbursed for my electricity company’s early termination fees if you switch to Rhythm?
Within 60 days of starting service on a qualifying Rhythm plan, send Rhythm Energy an email with the following attached:
A copy of your bill from your old supplier showing you were charged an early termination fee to switch to Rhythm.
A copy of the payment made for the final bill, reflecting that the final payment was made, including the ETF.
Their team will verify the documentation and complete the reimbursement process as soon as they receive it. Please keep your account current and pay your bills with Rhythm on time so you can receive your reimbursement after your 91st day of active service with Rhythm. The reimbursement will be applied in loyalty points equal to the value of your old supplier’s early termination fee, up to $150, which can be redeemed for bill credits.
Please note: You will only be eligible for this early termination fee reimbursement once, and participants in any of Rhythm’s Solar Buyback plans or Variable Plans are not eligible. Customers must not have any past-due charges to qualify for the credit to be applied.
Could Switching Save You Money Despite an ETF?
It’s possible. Even with an ETF, a switch could save you money in the long run if you’re overpaying for electricity.
Your first step towards savings is getting your home’s electricity usage and dropping it into our usage tool. You’ll instantly see monthly bill estimates and the total cost of each electricity plan.
Then, all it takes is some simple math to see which plan will save you the most money. Check out the video below to see what it looks like:
Very helpful, ComparePower makes switching providers stress-free. I plugged in my kwh usage from this past year & I could’ve been saving tons of money if I would have utilized this site & switched sooner!
Sure, Early Termination Fees (ETFs) help make those attractive promotional electricity rates possible, but you’ve got options to avoid them altogether:
No-Contract Plans: Want the freedom to switch whenever? Opt for slightly pricier month-to-month plans that come without the burden of ETFs.
Prepaid Electricity: With these plans, you pay upfront for what you use. When you stop the service, there’s no remaining balance, so no ETFs.
Take Control and Save Now
Want to avoid the risk of early termination fees later? Check out the most up-to-date fixed-rate electricity plans and reliable no-contract options.
Enter your zip code below and explore the best deals available near you.
See Today's Lowest Texas Electricity Rates
Stories from Texans Like You
At ComparePower, we’re all about making sure Texans like you get straightforward, fair electricity choices with no nasty shocks.
Our marketplace is packed with upfront pricing, genuine local support, and recommendations customized for your home. Consider us your local advisor, guiding you to the perfect energy plan.
Take a peek at the real-life stories from Texans who’ve used ComparePower. See how we’ve turned the often baffling task of choosing electricity plans into a breeze for you, the consumer — the one paying for this stuff.
Get Help Finding Your Best Plan
Call us at 855-441-3030 Monday through Friday, 8:30 a.m. to 6:30 p.m., or Saturday, 9:00 a.m. to 4:30 p.m.
