Every fixed-rate retail electricity contract in deregulated Texas comes with an Early Termination Fee. The PUCT requires disclosure in cents-per-kWh or flat-dollar form on the Electricity Facts Label, and the law caps how aggressively REPs can structure them — but within those limits, ETFs vary widely. A $50 ETF and a $295 ETF are both legal. Which one applies to your plan is a question of supplier choice and term length.
This is the working playbook for Texas ETFs.
How Texas ETFs Are Structured
Three common formats appear on Power to Choose listings:
Flat fee. A single dollar amount regardless of when you cancel. $150 and $295 are the most common. Simple and easy to compute. Most punishing if you cancel near the end of your term.
Per-month-remaining. $20 per month left on the contract, sometimes capped at $300. Less painful if you have only 2 to 3 months remaining, much more painful if you cancel early in a 36-month term.
Tiered by year. $295 in year one, $150 in year two, $50 in year three. Rewards longevity. Common on multi-year contracts.
The PUCT does not cap ETF amounts directly, but REPs must clearly disclose them on the EFL and the Welcome Letter (YRAC). Hidden or undisclosed ETFs are a violation reportable to the PUCT.
When Paying a Texas ETF Makes Sense
The math is straightforward:
(New rate - Old rate) × kWh remaining in your old term > ETF amount
Run it on a real Texas example. You're locked at 15.2 cents per kWh on a 24-month plan with 9 months left and a $295 ETF. The current best fixed-rate offer in your area is 10.4 cents on a fresh 12-month plan. You use 1,400 kWh per month.
- Monthly savings if you switch now: (0.152 - 0.104) × 1,400 = $67.20
- 9 months remaining savings: $67.20 × 9 = $604.80
- Net after $295 ETF: $604.80 - $295 = $309.80
- Plus 3 more months at the low rate as bonus (the new contract is 12 months): $201.60
Net win of about $510. Switch.
Same scenario but the new rate is 13.5 cents.
- Monthly savings: (0.152 - 0.135) × 1,400 = $23.80
- 9 months: $214.20
- Net after ETF: -$80.80
Don't switch. Wait until you're within 14 days of contract end (when most REPs waive ETF) and shop then.
The Four Ways to Legally Avoid Texas ETFs
1) End-of-Term Window. PUCT rule §25.475 requires REPs to send a "contract expiration notice" 30 to 60 days before your fixed term ends. Most REPs also waive the ETF during the final 14 to 30 days of the contract, allowing you to switch without penalty. Check your specific Terms of Service for the exact window. Use the calendar.
2) Moving Out of Service Territory. Every Texas REP waives the ETF if you're moving out of the supplier's service area — to a different TDU territory, to a non-deregulated city (Austin, San Antonio, El Paso), or out of state. You'll need to provide proof of new address (lease, closing docs, utility bill) within 30 days of cancellation. PUCT consumer protection rule §25.481 codifies this. The waiver is not optional for the REP.
3) Material Change in Contract Terms. If the REP modifies your contract in a way the PUCT considers "material" — changing the rate structure, the renewable content, or fees beyond a defined threshold — they must notify you 45 days in advance and you have a right to cancel without ETF. This typically only applies to variable-rate plans and rate changes on grandfathered plans.
4) Death or Permanent Disability. Texas law waives ETFs in cases of customer death, military deployment, or qualifying permanent disability. Documentation required.
Outside these four cases, the ETF applies and is enforceable.
When ETFs Are a Trap (Not a Tradeoff)
Variable plans with ETFs. A variable-rate plan with a $150 ETF is the worst of both worlds. The REP can raise your rate monthly, and you can't escape without paying. Texas allows this structure but it's relatively rare. If you see it, walk away — the only reason it exists is to lock customers into rising rates.
Plans with usage-band credits AND high ETFs. If you depend on hitting a 1,000-1,499 kWh band to earn a $50 credit, and you miss it for a month, your effective rate spikes. Cancel to escape, you owe the ETF on top. The product is designed to extract money from customers whose usage varies month to month. Read the credit clause as carefully as the ETF clause.
Hidden ETFs in "no contract" plans. A few REPs market plans as "no commitment, month-to-month" — but actually charge a flat fee for any cancellation in the first 30 to 90 days. This is technically legal under PUCT rules but borderline. The EFL has to disclose it. Read.
ETF Strategy by Plan Length
6 to 12 months. ETFs run $50 to $150 typically. Modest exposure. Worth signing if the rate is right.
18 to 24 months. ETFs run $150 to $295. The most common Texas residential category. Match the term to a reasonable forecast — if you're not confident you'll be at the same address for the full term, don't sign past 18 months.
36 to 60 months. ETFs run $295 to $500, or per-month-remaining structures. These long-term plans only make sense for stable homeowners with strong rate expectations. The ETF burn for an early cancellation is brutal.
Month-to-month variable. Almost always no ETF — but the rate compensates. Texas variable rates run 30 to 70% above market fixed rates because the REP isn't getting term commitment. Right for transitional housing only.
A Texas-Specific Tactic: The Pre-Switch Phone Call
Before paying an ETF and switching, call your current REP's retention line. Ask for a rate match against the offer you're considering. About 30% of the time, retention will offer a "renewal incentive" — a lower rate on a new contract — that beats both your current rate and the ETF math. The REP's goal is keeping you off another supplier. Their flexibility on rate is real but only surfaces when you ask.
If retention can match within 0.5 cents of the new offer, stay. The ETF doesn't apply on renewal. If they can't match, switch and pay the ETF.
The Calendar Reminder Habit
The single highest-ROI behavior in Texas retail electricity is calendar discipline. Set a reminder 30 days before your contract end date. Re-shop. Switch or renew on the natural end date. The ETF doesn't apply on the natural end date because the contract is expiring on its own terms.
Texans who do this consistently save $200 to $600 per year. Texans who let plans auto-renew into hold-over variable rates pay 30 to 70% above market and never know. The REP's whole retention model depends on you forgetting.
Don't forget. Mark the date.