Switching Light Companies Without Paying a Fee — When It's Free

Switching light companies in Texas is free in most cases — if your contract is expired, you’re on pay-as-you-go, or you’re within the 14-day rescission period. You signed up for a plan six months ago and now you’re seeing cheaper rates everywhere. Or your monthly bill has been creeping up and you want to compare light companies to see what else is out there. Either way, you’re wondering: can I switch without paying a fee?

The answer is usually yes — but it depends on your plan type. Here’s exactly when switching is free, when it costs money, and how to do it without any gap in service.

When Switching Is Completely Free

1. Your Contract Has Expired

If your contract has ended and you’re on a month-to-month rate, you can switch to any company at any time with zero fees. No penalty. No cancellation charge. Nothing.

This is the most common situation. Most people don’t realize their contract expired months ago. Check your latest bill — if it says “month-to-month” or “variable rate,” your contract is over and you’re free to go.

And you should probably go. Month-to-month rates after a contract expires are almost always 20-40% higher than what you’d pay on a new plan. More affordable light companies are out there — companies count on you not noticing.

2. You’re on a Pay-As-You-Go Plan

Pay-as-you-go and month-to-month prepaid plans don’t have contracts. There’s no termination fee because there’s nothing to terminate. You can switch light company with no deposit and no down payment by going pay-as-you-go — zero down, no credit check, no strings. You can switch to a different pay-as-you-go company or to a traditional plan at any time.

Any remaining balance on your pay-as-you-go account should be refundable. Check with your current company about their refund process. Some send a check, others credit it back to your payment method.

3. You’re Within the 14-Day Rescission Period

Texas law gives you a 14-day window after signing up with a new company to change your mind. During these 14 days, you can cancel with no penalty, even on a contract plan. This is sometimes called the “buyer’s remorse” period.

If you signed up for a plan and immediately realized you made a mistake — or found a better deal the next day — call and cancel within 14 days. No fee.

4. Your Contract is Ending Within 14 Days

Your light company is required to send you a notice when your contract is about to expire. This notice comes at least 30 days before expiration. Once you receive it, you can start shopping and switch without waiting for the exact expiration date.

If you switch during this window, most companies waive the early termination fee since the contract is essentially over anyway. Confirm this with your current company before you switch.

5. The Company Changed Your Terms

If your light company changes any material term of your contract — like raising fees, changing the rate structure, or modifying the plan terms — you have the right to cancel without penalty. This is called a “material change” and it voids the contract on your end.

If you get a notice saying your plan terms are changing, that’s your free exit. Switch to a better deal with no fee.

When Switching Costs Money

You’re in the Middle of a Contract

If you signed a 12-month fixed-rate contract and you’re 5 months in, canceling early will trigger an early termination fee. This is the main scenario where switching costs money.

Early termination fees typically range from:

• $50-$100 for shorter contracts (6 months)
• $100-$200 for 12-month contracts
• $150-$300 for 24-month contracts

Some companies charge a flat fee. Others charge per month remaining. A “$20 per remaining month” fee on a 12-month contract at month 5 means $20 x 7 = $140.

Is Paying the Fee Worth It?

Sometimes, yes. Do the math:

• Current plan: 16 cents per unit
• New plan: 11 cents per unit
• Monthly usage: 1,000 units
• Monthly savings: $50
• Early termination fee: $150
• Break-even: 3 months

If you have 7 months left on your contract and switching saves you $50/month, you’d save $350 minus the $150 fee = $200 net savings. That’s worth it.

If you have 2 months left, just wait it out. The fee would eat your savings.

How to Check Your Fee

Your early termination fee is listed on the facts label you received when you signed up. If you can’t find it:

• Check your online account
• Call customer service and ask
• It’s also on your contract confirmation email

How the Switch Actually Works

Switching light companies in Texas is surprisingly smooth. Here’s the process:

Step 1: Pick Your New Plan

Enter your ZIP and compare light companies available at your address. Look at the total per-unit cost at your usage level, not just the advertised rate. Check contract length, monthly fees, and whether month-to-month plans might work for you.

Step 2: Sign Up With the New Company

Complete the enrollment online or by phone. You’ll provide your address, name, and Social Security number (for credit check on post-paid plans). The new company handles everything from here.

Step 3: Your Lights Stay On the Whole Time

There’s no interruption. Your lights don’t flicker. The old company and new company coordinate a meter reading on the switch date. You get a final bill from the old company and start getting bills from the new one.

The switch typically takes 1-3 business days from when you sign up.

Step 4: You’ll Get a Final Bill

Your old company sends you a final bill covering usage through the switch date, plus any early termination fee if applicable. Pay this to close out the old account cleanly. An unpaid final bill can turn into a switch hold later, which is a headache you don’t need. Check our switch hold guide for why this matters.

Timing Your Switch for Maximum Savings

End of Contract

The best time to switch is right when your contract expires. You avoid the termination fee AND you don’t spend a single month on the expensive month-to-month rate.

Set a calendar reminder for 30 days before your contract end date. Start shopping then. Sign up for the new plan so it starts the day after your contract ends.

Before Summer

If your contract expires between March and May, that’s perfect timing. Lock in a fixed rate before summer prices kick in. Summer is the most expensive time to be on a variable or month-to-month rate.

After a Rate Increase

If your variable-rate plan jumps up, don’t wait. Switch immediately. Variable plans have no termination fee, so there’s no reason to stay on a plan that’s suddenly expensive.

Common Switching Mistakes to Avoid

Not Paying Your Final Bill

When you leave a company, they send a final bill. Pay it. An unpaid balance can result in a switch hold on your account, which means no other company can serve you until it’s cleared. Pay the final bill and keep the confirmation.

Switching Too Often

If you switch companies every month chasing the lowest rate, it creates a messy record and you might run into processing delays. Picking a good 12-month fixed plan and sticking with it is usually better than constantly switching between variable plans.

Not Checking the Full Cost

When comparing plans, look at the average price per unit at your usage level on the facts label, not the headline rate. A plan advertising “10 cents per unit” might be 14 cents when you include fees and delivery charges. Read our guide to facts labels for the breakdown.

Forgetting to Set a Reminder for the New Contract

You switched to a great plan. Awesome. Now set a reminder for when the new contract ends. If you forget, you’ll end up on an expensive month-to-month rate again. This is how the cycle works, and companies are counting on you to forget.

What If You Have a Switch Hold?

A switch hold means you owe money to a previous light company and they’ve blocked you from switching. You can’t sign up with a new company until the hold is cleared.

To clear a switch hold:

1. Call the company that placed the hold
2. Pay the balance or set up a payment arrangement
3. Get confirmation that the hold is released
4. Wait 1-3 business days for the hold to drop

Full details in our switch hold guide.

Bottom Line

Switching light companies in Texas is free if your contract is expired, you’re on pay-as-you-go, you’re in the 14-day rescission window, or the company changed your terms. If you’re mid-contract, do the math — the savings from a cheaper plan might outweigh the termination fee.

The switch itself takes 1-3 days with no interruption to your lights. Pay your final bill, sign up for the new plan, and you’re done. And if your credit makes a traditional plan tough, pay-as-you-go is always an option — no down payment, no deposit, no credit check.

Start by checking what’s available at your address. Enter your ZIP to compare light companies and see if there’s a more affordable deal waiting for you.

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Related reading:

• Fixed vs Variable Rate Light Plans — Which One Won’t Surprise You
• How to Actually Read That Facts Label Before You Pick a Plan
• Power to Choose vs NoDepositLights: What’s the Difference?

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This guide is for informational purposes only and does not constitute legal or financial advice. For official rules, visit the Public Utility Commission of Texas. NoDepositLights.com is powered by Compare Power (PUCT License BR190020).