Early Termination Fees for Electricity Providers

Learn more about what an early termination fee is and how to avoid it.

Written by Allie Ogletree

Edited by Jamie Cesanek

Last updated 05/09/2024

• If you have a fixed-rate energy plan, you may face an early termination fee for switching plans.
• Early termination fees cost anywhere from $100 to $395 on average.
• Some energy providers charge $20 per month remaining in your fixed-rate contract.
• You won’t incur an early termination fee if you’re moving out of your provider’s current service area.

What are early termination fees?

An early termination fee (ETF) is a penalty customers may experience if they try to end a contract with their Texas electricity provider before the term ends. You can check the ETF of any energy plan by reading through the Electricity Facts Label (EFL). Generally speaking, the longer the plan, the higher the ETF.

Understanding early termination fees by plan type

Most fixed-rate energy plans have an ETF to discourage customers from switching plans prematurely. Some prepaid plans also require a specified contract length and charge an ETF. If you want to avoid early cancellation fees, you can use the SaveOnEnergy marketplace to search for variable-rate plans. This plan type does not include an ETF, so enrolled customers can switch to a new plan or provider at any time.

How early termination fees work

You may want to switch to a new electricity provider for several reasons— whether you want to find a cheaper rate or don’t like your current energy company, your provider will automatically charge the ETF listed in your contract if you cancel before it’s over.

Most electric companies have flat or monthly cancellation fees for ending a plan early. For example, you may pay a flat rate of $150, or you might need to pay $20 per month until the end of your plan when you decide to cancel. Read the fine print of your EFL to understand which type of ETF your plan has.

Frequently asked questions about ETFs

• How much do early termination fees cost?
  Most providers on the SaveOnEnergy marketplace charge ETFs of $150 to $395. Plans with a monthly fee through the duration of your fixed-rate plan typically charge $20 per month remaining on the contract. You can view each plan’s ETF when shopping for energy on our website. Enter your ZIP code and click on plan documents to find the EFL with a price breakdown.

• Where can I check my energy plan’s early termination fee?
  You can find your energy plan’s ETF by learning how to read your electricity bill and reviewing the Electric Facts Label (EFL) that came with your plan. If you’re looking for a new plan and want to check its ETF, simply search for your ZIP code on our marketplace and click on the plan documents tab to access the EFL.

• How can I find the lowest early termination fee?
  On average, the shortest fixed-rate plans also have the lowest ETFs. Most fixed-rate plans on our marketplace last for 12 months and have a $150 ETF. Most 24-month plans have ETFs ranging from $200 to $295. Meanwhile, you’ll see the highest ETFs for 36-month plans, which range from $200 to $395.

• How can I avoid paying an ETF?
  You can sign up for a variable-rate plan for more flexibility. With these plans, you can cancel any time without incurring a fee. However, variable-rate plans can be risky because your rate will fluctuate depending on the energy market.