Start shopping about 60 to 90 days before your business electricity contract ends. Texas rules require at least three expiration notices, the last at least 14 days before a small commercial fixed rate ends. If you do nothing, you move to a month-to-month plan you can cancel anytime without a fee, though its price can change each billing cycle.
This small business electricity renewal guide covers what the rule behind those protections actually says, a renewal timeline you can put on the calendar, and what to compare on each Electricity Facts Label (EFL). It's written for owners and office managers of Texas businesses under 50 kW, like restaurants, law and professional offices, and franchise locations. The rule is 16 TAC §25.475, the Public Utility Commission of Texas (PUCT) rule for residential and small commercial customers.
Texas draws a specific line. Under 16 TAC §25.471(d)(11), a small commercial customer is "a non-residential customer that has a peak demand of less than 50 kilowatts during any 12-month period," unless its load is part of an aggregation program whose peak demand tops 50 kW in the same 12 months. So the test is peak demand in kW, not your monthly kWh. And it's under 50 kW, not 50 or less.
Peak demand is the biggest burst of power your location pulls over a short window. Power to Choose, the PUCT's shopping site, defines it in its glossary as "the highest 15- or 30-minute demand period recorded during a 12-month period." If you're billed on demand, check the bill. Texas billing rules call for it to show the units measured, including actual kW or kVA and, where it applies, billed kW or kVA, as long as your provider gets that data from the utility. Oncor also notes you can access your business's usage history at Smart Meter Texas.
Why does the class matter? The notice timeline, the 14-day statements and the month-to-month default below all come from §25.475, which covers residential and small commercial customers. Above the line, a business "may agree to terms of service that reflect either a higher or lower level of customer protections" than the rules would otherwise give (§25.471(a)(3)). Power to Choose notes that "For many businesses, shopping for electricity is a negotiated purchase process."
If you're on a fixed rate product, your provider has to warn you well before the end date. Section 25.475(e)(1) requires "at least three written notices" of the expiration date, sent during the last third of the contract period and spread out as evenly as practical. On a contract of 12 months or longer, the first notice can come up to three months before the end date. For a small commercial customer, "the final notice must be provided at least 14 days before the fixed rate contract will expire."
The notices go by mail to your billing address unless you've opted into electronic communications. Look for the words "Contract Expiration Notice" on the outside of the envelope or in the subject line of an electronic bill. You don't have to wait for it, either. Every small commercial bill has to show your fixed-rate expiration date in bold, underlined type, under 16 TAC §25.479(c)(6).
The notice itself has to include:
One more protection is easy to miss. If your provider doesn't send the required notices and you don't pick another product before the term ends, the rule says it "must continue serving the customer under the terms of the fixed rate contract" until it does provide notice.
A note on older contracts: these small commercial notice requirements took effect in early 2022, and a contract signed before then follows the version of the rule in place when it was signed.
You don't lose power. If you take no action after the final notice, §25.475(e)(2)(A) requires your provider to serve you on "a default renewal product that is a month-to-month product that the customer may cancel at any time without a fee." The same rule says that price "may vary between billing cycles based on clear terms designed to be easily understood by the average customer."
Month-to-month has a precise meaning in Texas. It's a contract with a term of 31 days or less, and it "may not contain a termination fee or penalty" (§25.475(b)(7)). You can also read the default product's terms today, because every contract has to include the terms of the default renewal product you'd roll into.
Will the default cost more than a new fixed plan? The rule doesn't say, and the only way to know is the default product's EFL, which the final notice has to include. Compare its average price at your usage with the renewal offers before you decide.
One timing detail: if your contract ends on a calendar date, your provider can keep billing the contract price "through the first meter read on or after the end date" (§25.475(c)(3)(C)). So the last bill at your old price may run a few days past the date on your notice.
The rule sets the minimum notice. It doesn't tell you when to start shopping. Here's the timeline we'd recommend for a small business on a fixed-rate contract, counted back from the expiration date on your bill.
| Days before expiration | What to do |
|---|---|
| 90 days | Find the expiration date on your bill and pull 12 months of usage, including peak kW if you're billed on demand. On a contract of 12 months or longer, the first expiration notice can arrive any time from here. |
| 60 days | Request offers. Get the EFL and terms of service for each one and compare them at your own usage, not just the sample levels on the label. |
| 30 days | Pick a plan and confirm the start date in writing. Leave room for processing. The rule's required wording for contract-change notices warns that "establishing service with another REP may take up to seven business days." |
| 14 days | Your final expiration notice must have arrived. If your contract has an early termination fee, the notice must include the bold statement that no termination penalty applies in the 14 days before the contract ends. |
| Expiration day | If you haven't chosen anything, you're on the month-to-month default. You can still leave it at any time without a fee. |
Want to see Ambit Energy's small business options before your notice deadline? Request small business plan options
The EFL is the standardized fact sheet every Texas provider has to publish for each product. It's the closest thing to an apples-to-apples electricity comparison for a small business, because every provider has to use the same price points. Under §25.475(g)(2)(C)(ii), the average price is shown in cents per kWh, rounded to the nearest tenth of a cent, at 1,500, 2,500 and 3,500 kWh a month. "If demand charges apply assume a 30 percent load factor." Load factor is simply how steady your use is: your average demand divided by your peak.
That 30 percent assumption matters. If your location runs steady all day, or spikes hard at lunch, your real average price can land away from the label's sample numbers. Ask for the price at your own usage and load shape.
| What to check | Where it is | Why it matters |
|---|---|---|
| Fixed rate or variable price | EFL | The EFL must say which one it is. A fixed rate product holds its price for the term, apart from the pass-through changes the rule allows. |
| Average price at 1,500, 2,500 and 3,500 kWh | EFL | The standard comparison points. If demand charges apply, they assume a 30 percent load factor. |
| How the demand charge works | Terms of service | For small commercial customers, the terms of service must describe the demand charge and how it's applied, if there is one. |
| Term, minimum term and early termination fee | EFL | How long you're committed and what leaving early costs. |
| Fees, and whether they're in the price | EFL | The EFL lists every fee the provider may charge and whether it's included in the recurring charges. |
| Renewable share | EFL | The product's renewable percentage, shown next to the statewide average. |
Our guide to reading a Texas Electricity Facts Label walks through the residential basics. The idea is the same, but the small commercial price points are different.
Lining up EFLs side by side and want Ambit's in the mix? Request small business plan options
For a small commercial account, the choice is narrower than you might expect. Providers can't offer indexed products to residential or small commercial customers on or after February 1, 2022, and wholesale indexed products have been off the table since September 1, 2021 (§25.475(c)(3)(F)). That leaves fixed rate products and variable price products, including the month-to-month default.
In Texas, a fixed rate product has a term of at least three months, and its price stays the same for that term except for actual changes in TDU charges, ERCOT or Texas Regional Entity administrative fees, and new costs from federal, state or local law (§25.475(b)(5)). A month-to-month product carries no termination fee, but its price can change from one billing cycle to the next.
Here's how we'd weigh it for a small business:
Renewing doesn't change them, and neither does switching providers. Delivery charges come from the utility that owns the poles and wires at your location, called the TDU. Oncor lists four of them in the state's deregulated zones: Oncor, CenterPoint Energy Houston Electric, Texas-New Mexico Power (TNMP) and AEP Texas. As Oncor's Delivery Charges 101 page puts it, its "delivery rates are regulated and approved by the Public Utility Commission of Texas," and providers include those charges on your bill "at a rate structure agreed to by the customer when they enroll."
Those charges do change over time. Oncor notes that "TDU delivery charges are revised from time to time," and the PUCT rule lets even a fixed rate product pass through "actual changes in TDU charges" (§25.475(b)(5)). When that happens, your bill has to show the change as a separate line item or carry a notice that the amount billed may include price changes allowed by law or regulatory actions (§25.475(d)(2)(B)).
How those charges are built also depends on your demand. In Oncor's area, nonresidential accounts above 10 kW move to a schedule where most of the variable delivery charges are billed on kW instead of kWh, and CenterPoint draws its line at 10 kVA (each utility's current tariff, read November 3, 2026). Our guide to TDU delivery charges breaks down each line on the bill.
Running a restaurant? Our guide to what uses the most electricity in a restaurant shows how demand billing plays out in a busy kitchen.
Ambit Energy is the retail electric provider, so it's the company that sells you the electricity and sends the bill. Your TDU still delivers the power and reads the meter, whichever provider you choose.
If your commercial electricity renewal is coming up, the business plan request form is the place to start. Sending it doesn't enroll you in anything. We'll reach out to talk through your options.
Send your service address in the form, and we'll confirm the business plans available there.
Ready to plan your renewal? Request small business plan options
Renewing at home instead? Residential customers get different notice timing, which our guide to the best time to renew your electricity contract covers.
Opening another location? Our guide to setting up electricity before move-in day walks through ESI IDs, peak demand and move-in timing.
About 60 to 90 days before the expiration date printed on your bill. That leaves time to gather usage, request offers and compare EFLs before the final notice deadline. On a contract of 12 months or longer, the first expiration notice can arrive up to three months before the end date, so treat it as your cue to start.
Your service continues. Your provider must move you to a month-to-month default product you can cancel at any time without a fee, and the final notice has to include that product's EFL. The month-to-month price can vary between billing cycles.
If your contract has an early termination fee, your expiration notice must state, in bold, that no termination penalty applies to small commercial customers during the 14 days before the contract ends. Check the notice and your terms of service for the exact dates. Before that window, the early termination terms in your contract apply.
Look at your peak demand. A small commercial customer is a nonresidential customer with peak demand under 50 kW during any 12-month period, unless its load is part of an aggregation that peaks above 50 kW. If your bill lists actual or billed kW, that's your demand. Smart Meter Texas shows your usage history too.
Start with whether it's a fixed rate or variable price product and the average price at 1,500, 2,500 and 3,500 kWh a month, which assumes a 30 percent load factor if demand charges apply. Then check the term, the early termination fee and the fee list, and read how the terms of service apply any demand charge.
Not because you renewed. Delivery charges come from your TDU's PUCT-approved tariff and change on the utility's schedule, and a fixed rate product can pass through actual changes in TDU charges. Switching providers doesn't change the TDU's charges either.
Plan details and rates subject to change. Electricity service is subject to credit approval. Rule text and tariff details in this article are as of November 3, 2026, from the sources linked above. Published by Ambit Energy, VIP Energy Service.
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