How does ERCOT pricing work for Texas businesses?

ERCOT (Electric Reliability Council of Texas) operates the wholesale electricity market for 90% of Texas. Generators sell power to Retail Electric Providers (REPs), who then sell it to businesses at retail rates. ERCOT does not sell electricity directly to businesses. Your Transmission Distribution Utility (TDU) delivers power over regulated wires — your REP sets your supply rate. Understanding ERCOT nodal pricing helps businesses time contract renewals to avoid rate spikes.

Do Texas commercial electricity contracts auto-renew?

Yes. Most Texas commercial electricity contracts include auto-renewal clauses. If you do not actively renew or switch REPs before your contract expires, your provider will typically roll you into a month-to-month variable rate plan. These rollover rates are often 20–40% higher than competitive fixed-rate market offers. Texas businesses should begin shopping rates 90–120 days before contract expiration to maximize negotiating leverage.

What happens if I do nothing before my electricity contract renewal?

If no action is taken before your Texas commercial electricity contract expires, your REP will auto-renew you at rollover pricing — typically a month-to-month variable rate at above-market prices. You remain locked into higher rates until you negotiate a new fixed contract or switch REPs. The longer you wait, the more you overpay. Most contracts allow switching at any month-to-month point without early termination fees.

Can I lower my business electricity rate without installing solar?

Yes. In Texas's deregulated electricity market, businesses can reduce their electricity supply costs by comparing Retail Electric Provider (REP) rates, switching from rollover pricing to fixed-rate contracts, optimizing demand charge structures, and timing contract renewals during periods of favorable ERCOT wholesale market pricing. No solar panels or equipment purchases are required.

Who delivers my power in Texas — my REP or the utility?

Your power is physically delivered by your Transmission Distribution Utility (TDU) — Oncor, CenterPoint Energy, AEP Texas, or TNMP — depending on your location. Your TDU never changes and its delivery charges are regulated by the PUCT. Your Retail Electric Provider (REP) sets your supply rate and handles billing. You choose your REP; you cannot choose your TDU.

How do electricity brokers get paid in Texas?

In Texas, PUCT-licensed electricity brokers are typically compensated through commissions paid by Retail Electric Providers (REPs) when a business enrolls with a provider. This means there is generally no direct cost to the business for broker services. Power My Business is a PUCT-registered broker (BR240245) compensated by providers, not directly by the businesses we serve.

Quick Answer

The In-House Energy Desk is a 4-component playbook: (1) renewal calendar with alerts, (2) apples-to-apples bid rules, (3) contract structure decision rules, and (4) invoice verification checklist.

In-House Energy Desk: 1-Page Outline

The 4-component playbook for controlling your electricity procurement.

The 4 Components

Renewal Calendar + Alerts

The most common electricity procurement mistake is missing the renewal window. A renewal calendar fixes this.

Map your contract end date (check your contract or call your REP)
Set a 12-month alert: start market research
Set a 6-month alert: begin bid process
Set a 3-month alert: final decision deadline
Assign an internal owner responsible for each alert

Apples-to-Apples Bid Rules

Bids are only comparable if they use the same parameters. Define your bid template before you request quotes.

Same product type (fixed vs indexed — decide before requesting bids)
Same contract term (12, 24, or 36 months — pick one for comparison)
Same load profile (use your 12-month usage history)
Same start date
Itemized TDSP charges (separate from energy charge)
Early termination fee disclosed

Contract Structure Decision Rules

Fixed vs indexed is not a one-size-fits-all decision. Build decision rules based on your risk preference.

Consider fixed pricing if:

→Budget predictability is critical
→You can't absorb price spikes
→Wholesale prices are near historical lows

Consider indexed pricing if:

→You can absorb short-term volatility
→Wholesale prices are elevated
→You have operational flexibility to shift load

Note: This is a decision framework, not financial advice. Market conditions and your specific usage profile affect the right choice.

Invoice Verification Checklist

Invoice errors and billing discrepancies are common. A monthly checklist catches them before they compound.

Energy charge matches contracted rate ($/kWh)
TDSP charges are itemized separately
Usage (kWh) matches your meter reads
No unexpected fees or pass-through charges
Contract term and start/end dates are correct
Early termination fee terms are documented

Ready to install this in your business?

The readiness check maps your specific situation in 10 minutes.

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Power My Business is not a utility or a Retail Electric Provider (REP). Savings are not guaranteed. Information provided is general and not financial or legal advice. PUCT Broker Registration #BR240245. Privacy Policy | Terms of Service