When to Renew Your Business Electricity Contract (12 to 18 Months Early Is Not a Typo)
Start shopping for your next Texas commercial electricity contract 12 to 18 months before your current one expires. That timing matches how suppliers actually buy power (forward pricing) and keeps you negotiating as a shopper, not scrambling near expiration and landing on an expensive month-to-month holdover rate.
A Garland manufacturer running 30,000 kWh/month on a contract that renews at 9.5 cents/kWh instead of a competitively bid 7.8 cents/kWh (a realistic example, not a live quote) pays an extra $510 a month. That's $6,120 a year, gone, for no reason other than waiting until the renewal letter showed up to start shopping. In Texas commercial electricity, timing isn't a minor detail. It's the difference between negotiating from strength and getting whatever rate the incumbent supplier feels like offering a captive customer.
Why the Renewal Letter Arrives at the Worst Possible Moment
Most Texas commercial electricity suppliers mail or email a renewal offer somewhere in the last couple months before your contract ends. By the time it lands on your desk, you're weeks from expiration: not enough runway to solicit competitive bids from other ERCOT retail electric providers, compare demand charge structures, and get a new contract signed and processed before your current one lapses. The supplier knows this. A renewal offer sent late isn't an oversight. It's priced for a customer who has no real alternative but to sign.
Forward Pricing: Why Suppliers Quote Future Start Dates
Commercial electricity suppliers don't buy power the day your contract starts. They hedge and purchase wholesale energy blocks months, sometimes more than a year, ahead of a contract's actual start date. A quote you get today for a contract starting in 14 months reflects forward market pricing today, not the spot price ERCOT happens to be running when your new term actually begins. This is why suppliers are willing, even eager, to quote a start date well into the future. They're not guessing at future rates. They're locking in the power they need to serve your account on a schedule that matches how they buy it. Waiting until 60 days before expiration to ask for a quote doesn't get you a 'more current' price. It gets you a rushed one, with far fewer suppliers willing to compete for your business on short notice.
The 12-to-18-Month Renewal Window Strategy
We tell every Texas commercial client the same thing: mark your calendar 12 to 18 months before your contract expires and start soliciting competitive bids then. That's not aggressive. It's the window where suppliers are actually able to build accurate forward-priced quotes for your account, and where you still have full leverage because you're not up against a deadline. A Fort Worth warehouse with an 18-month buffer can canvass multiple REPs, compare 12-, 24-, and 36-month terms, and negotiate demand charge riders. A Fort Worth warehouse with three weeks left on its contract can do almost none of that. Dallas-Fort Worth's Oncor territory alone supports one of the largest competitive retail markets in ERCOT, with contract terms ranging from 6 to 36 months. That only helps you if you leave enough time to actually shop it.
What Happens on Holdover Rates
If your contract ends before you've signed a new one, the TDU (Oncor, CenterPoint, AEP Texas, or whichever wires company serves your building) keeps delivering power without interruption. That part never changes. What changes is your supply rate. Your REP automatically shifts your account to a month-to-month holdover or 'default' rate, and it is almost never priced to your advantage.
- Priced above your expired contract rate, typically as a variable or index-based month-to-month charge
- No fixed term, which means it can move again with little to no notice
- Zero protection from summer ERCOT price swings, including demand-driven cost spikes during peak months
- No negotiating leverage: you're now a captive account paying whatever the incumbent supplier sets, not a rate you competitively bid
The single most common mistake we see on Texas commercial bills: a business waits for the renewal letter, spends two or three weeks comparing offers, and lands on a holdover rate anyway because the paperwork didn't clear before expiration. That gap, even 30 to 60 days, can cost more than the entire savings a new contract was supposed to deliver.
Set a recurring reminder 18 months before every commercial contract's end date. That's when we start building competitive bids for clients. Not because the market will necessarily be better then, but because it's the only window where you're negotiating as a shopper instead of a captive customer stuck on holdover.
Don't wait for the renewal letter. Get a competitive bid on your Texas commercial electricity contract now, whether your current term ends in 3 months or 15.
Get My QuoteFrequently asked questions
12 to 18 months before your current contract's expiration date. That's the window where suppliers can build accurate forward-priced quotes and you still have leverage to negotiate, instead of scrambling in the final weeks before expiration.
It's the month-to-month rate your supplier automatically moves you to if your fixed contract expires before you've signed a new one. It's typically variable or index-based and priced above your expired fixed rate, with no long-term protection from price swings.
Because that's when they actually buy the wholesale power to serve your account. Suppliers hedge energy purchases months to over a year ahead of a contract's start date, so a quote for a future start date reflects forward pricing built around that purchase schedule, not a guess.
No. Your local TDU (Oncor, CenterPoint, AEP Texas, or whichever wires company serves your address) delivers the electricity and handles outages no matter which supplier you're contracted with. Reliability never changes with a supplier switch.
No. EIA's 8.66 cents/kWh Texas commercial average (06/2026) is all-in: supply, delivery, and fees combined. Supplier contract quotes are supply-only, so they're not directly comparable to that all-in average.