PUCT Broker Registration #BR240245 | Power My Business is a commercial electricity consulting firm. We are not a utility company, REP, or solar installer. We analyze and compare retail electricity supply contracts within the Texas deregulated market (ERCOT).

Power My Business - Commercial Electricity Company
POWER MY BUSINESS

Texas Commercial Electricity Experts

Critical Contract Management Issue

Electricity Renewal Risk: The Hidden Cost of Contract Expiration

Most Texas businesses that ignore contract expiration dates pay 20-40% more for electricity due to automatic rollover pricing. Understanding renewal risk is the first step to avoiding unnecessary costs.

What Is Electricity Renewal Risk?

Electricity renewal risk refers to the financial exposure businesses face when commercial electricity contracts expire without proactive renewal or switching. In Texas's deregulated ERCOT market, contracts that are not renewed automatically roll into month-to-month plans at rates typically 20-40% higher than competitive market offers. This rollover pricing is intentionally punitive, designed to protect Retail Electric Providers (REPs) from wholesale price volatility while incentivizing customers to renew. Businesses that miss expiration dates—or assume their current rate continues—unknowingly overpay for months or years until they take action.

How Auto-Renewal and Rollover Pricing Work in Texas

The Timeline

120-90 Days Before Expiration

Optimal window to shop rates and negotiate with REPs. Wholesale market conditions are visible, and REPs compete aggressively for renewals.

60-30 Days Before Expiration

REPs send contract expiration notices (required by PUCT). Many businesses miss these emails or assume they'll be contacted again closer to expiration.

Contract Expiration Date

If no action is taken, the contract automatically rolls into a month-to-month plan at a significantly higher rate—often 20-40% above market.

Months After Expiration

Businesses continue paying rollover rates until they proactively shop, switch, or renegotiate. Many stay on rollover pricing for 6-18 months before realizing the overpayment.

The Cost Impact

Example: 50,000 kWh/Month Business
Competitive market rate:$0.085/kWh
Rollover rate (30% higher):$0.111/kWh
Monthly overpayment:$1,300
Annual overpayment:$15,600

For larger businesses (200,000+ kWh/month), rollover pricing can cost $5,000-$10,000+ per month—money that could be reinvested in operations, payroll, or growth.

Why Do REPs Use Rollover Pricing?

Wholesale Price Protection

REPs buy electricity on the wholesale market and sell it to customers at fixed rates. When contracts expire, REPs face spot market volatility. Rollover rates are set high enough to cover worst-case wholesale price spikes, protecting REPs from losses.

Profit Maximization

Rollover rates generate significantly higher margins than competitive fixed-rate contracts. REPs profit from customer inertia—businesses that don't shop rates or miss expiration notices become high-margin accounts.

Renewal Incentive

High rollover rates are designed to motivate customers to renew proactively. REPs prefer long-term fixed contracts because they provide revenue predictability and allow REPs to hedge wholesale supply costs more effectively.

How to Protect Your Business from Renewal Risk

Track Your Contract Expiration Date

Set calendar reminders 120, 90, and 60 days before your contract expires. Don't rely on REP notices—many businesses miss emails or assume they'll be contacted again. Proactive tracking is the only way to avoid rollover pricing.

Shop Rates 90-120 Days in Advance

Start shopping rates 3-4 months before expiration. This gives you time to compare offers from multiple REPs, negotiate terms, and lock in favorable pricing before wholesale market conditions change.

Work with a Licensed Broker

Commercial electricity brokers track expiration dates, shop rates across 150+ REPs, and negotiate contracts on your behalf—at no cost to you. Brokers are paid by REPs and have access to pricing that individual businesses can't secure on their own.

Understand Your Usage and TDU Territory

Know your monthly kWh usage, demand charges (if applicable), and TDU (Oncor, CenterPoint, AEP, TNMP). This information is critical for comparing apples-to-apples offers and identifying the best contract structure for your business.

Never Let a Contract Auto-Renew

Even if you're satisfied with your current REP, always shop rates before renewal. Market conditions change, and your REP's renewal offer is rarely their best available rate. Competition drives better pricing—use it to your advantage.

Audit Your Renewal Risk Today

We analyze your contract expiration date, current rate, and ERCOT market timing to identify renewal risk and cost-saving opportunities. No solar, no equipment, no obligation.