What Happens If Your Texas Electricity Provider Goes Out of Business?

Your Lights Should Stay On

A Texas retail electric provider can exit the market or stop serving customers, yet the wires that deliver power stay in place. The delivery system is operated by a transmission and distribution utility, so the physical connection to your home continues. What changes is the company that bills you for the energy portion of the bill.

When this occurs, customers are transferred to a backup retail provider through the Provider of Last Resort process. This is not the same as a local power outage or a shutoff for unpaid bills. The goal is to keep service active while you select a new plan.

Who Takes Over When a REP Can No Longer Serve You

A retail electric provider sells the plan and handles billing. It does not own the poles and wires. When that company can no longer serve you, the Public Utility Commission of Texas designates a Provider of Last Resort, or POLR, to take over service in that territory.

The specific POLR assigned depends on where you live. Do not assume a fixed list of POLR providers without checking current PUCT records, because assignments can shift.

The Notice You Should Expect Before the Switch

You should receive written notice that your current provider will stop serving the account. The notice explains the upcoming transfer to the POLR if you do not enroll elsewhere first. Check every channel tied to the account: email, postal mail, and the online portal.

The date on the notice sets the timeline for shopping. Mark it and keep a copy.

What Happens on the POLR Transfer Date

If you have not chosen a new plan, service moves to the POLR on the date stated in the notice. Power remains on, but the company name on the bill changes and the plan terms reset. The first POLR bill often carries different pricing and possible deposit language.

Save the original notice, the final bill from the old provider, the POLR welcome materials, and any confirmation numbers. These records help if questions arise about balances or the transfer itself.

Why the Backup Plan May Cost More

POLR service functions as a short-term safety net rather than a competitive rate option. Providers describe these plans as month-to-month and priced to cover uncertainty. Many households see higher energy charges compared with fixed-rate offers available in the same area.

Review the first POLR statement closely for base charges, usage tiers, and any deposit request. The new provider may ask for a deposit within the first month.

How Long You Should Stay on POLR Service

Most customers compare plans soon after the transfer notice arrives. Competitor sources point to a possible 60-day window for penalty-free switching, but verify the current rule directly with PUCT materials before relying on that timeframe.

You are free to leave the POLR once you locate a plan that fits your usage and preferences. Staying longer exposes the household to variable backup pricing.

What Happens to Your Deposit or Credit Balance

Any deposit or credit balance held by the old provider is handled separately from any amount you still owe. The previous company may send a refund or statement even after service has moved. At the same time, unpaid balances remain your responsibility and do not disappear.

The new POLR can apply its own deposit rules. Read the terms that arrive with the transfer notice.

How to Pick a Replacement Plan Without Rushing Into a Bad Rate

Begin with the Electricity Facts Label, the Terms of Service, and the Your Rights as a Customer disclosure. These documents show the actual rate structure, all fees, and early termination charges.

Compare offers at the exact usage level that matches your household history. Look for base charges, usage credits, delivery charges, and early termination fees that can change the total even when the advertised rate appears attractive. Choose the plan that matches the problem you need solved, such as price stability or a shorter commitment term.

If Another Company Buys or Takes Over Your Provider

A provider closure and a contract assignment are not always the same event. If another company purchases the customer book, the original contract terms may continue under the new owner. Review the assignment, cancellation, and change-of-control sections in your plan documents before assuming obligations end.

When the language is unclear, refer to the official notices you received and consider professional guidance.

If the Problem Is Nonpayment, Not Provider Closure

A retail electric provider leaving the market differs from a disconnection for nonpayment. Texas rules for nonpayment include specific notice requirements and payment-plan options that do not apply to a market transfer. If your notice mentions nonpayment, follow the steps listed on that notice and check current Texas customer protections rather than POLR procedures.

What Renters and Landlord-Paid Accounts Should Check

Some renters do not hold the electricity account directly. When the landlord or property manager is the account holder, notices may go to them instead of the resident. Confirm who receives billing statements for the property and ask whether the account is switching providers.

Landlord-paid utility rules remain a separate legal matter from a retail provider exit.

A Practical Plan for the Day You Get the Notice

Save every document that arrives with the exit notice. Confirm the exact transfer date, account number, and service address. Compare replacement plans using the Electricity Facts Label at your normal usage level. Escalate billing or transfer questions through official Texas customer-service channels once you have the records in hand.