So, you forgot about your energy contract renewal and now have a shockingly large bill. Unfortunately, this is a common occurrence in deregulated energy states. But, do not fret for too much longer. You’ve come to the right place. As a nationally-recognized energy brokerage firm, Diversegy has helped hundreds of commercial customers through this dilemma. This article explains why your bill is so high and what you can do about it. Read on to solve your energy bill nightmare.
What Would Cause My Electric Bill To Double?
If you hired an energy broker to negotiate with energy suppliers on your behalf, or you contracted with a retail energy supplier directly, then chances are you enrolled in an energy contract. Now, the terms of the energy contract language will dictate what happens if you do not renew your agreement after it expires. Some energy suppliers outline the specific terms of their post-contract rates, while others simply state that they will bill a market-based, variable rate. Regardless, we often see energy providers charging egregious energy prices when fixed-rate contract terms expire.
If you received an electric bill that seems to be too high, then chances are your contract expired and your supplier is charging you a higher price. There are some other scenarios, however, that could cause higher-than-expected energy bills, including:
- Your fixed-rate expired and you are on a market-based variable rate (previously mentioned)
- Your account was slammed, or enrolled without permission, and the new supplier is charging a high rate
- You canceled your contract early and the early termination fee is on your electricity bill as a line item
- You used more energy than expected and your bill is higher due to significant energy consumption
For the case of this article, we will assume that your contract expired and your rate more than doubled. Let’s explore some solutions to this problem.
What To Do If Your Electric Rate Increased
If your electric rate increased due to an expired contract, legally the responsibility is yours. However, there are several things you can do to rectify the situation.
Call Your Energy Broker
If you happened to have hired an energy broker to negotiate your last fixed-rate energy contract, then call him/her first. After all, a responsible energy broker should monitor your contract’s expiration date to ensure that you renew on time. You can ask your broker to contact the supplier with the hopes of rectifying the high rate. The energy broker might have a good relationship with the supplier and be able to solve the problem for you.
Make A Deal With The Supplier
Another option is to contact the energy supplier and attempt to negotiate an arrangement with them directly. The supplier does not want to lose you as a customer. By signing a new fixed-rate contract, the supplier might be willing to issue you a credit for the higher rate in exchange for staying as a customer. Sometimes it can be hard to continue to do business with a company that seems to be taking advantage of you; however, oftentimes this is the best way to solve the problem.
Contact The PUC
If you feel that the price charged is egregious or does not follow the terms of your agreement, you might be able to file an informal or formal complaint with the Public Utility Commission. This is a big step since you will need to state and prove your case and can often take months to hear a response. In some states, business entities are not protected under PUC law. If you decide to go this route, we recommend that you give notice to the supplier of your plans to file a complaint. They may be willing to negotiate with you in an attempt to avoid legal action.
Switch Energy Suppliers
If you are unable to make an agreement with your existing energy provider, then you must switch energy suppliers. In some deregulated states you can switch back to the utility company’s default service rate. You may also benefit by choosing a lower fixed rate with a different energy supplier. Either way, it is important to switch away from the current provider so you do not continue to receive high bills in the future.
Avoiding High, Post-Term Energy Rates In The Future
There are many ways to learn from your situation and avoid high energy bills in the future. Let’s explore some of the best ways to navigate energy suppliers and avoid a high variable energy price.
Renew On Time
The best way to avoid a post-term, high rate is to always renew your energy contract on time. Set a reminder in your calendar for a few months before your contract expires so you can begin gathering renewal price quotes. Remember, energy prices have a futures market, so you can sign a rate that starts several months later. If you are using an energy broker to negotiate your energy contracts, then he or she will most likely remind you of your contract expiration and help you renew your contract.
Read Your Contract Terms
Before signing your next energy contract, be sure to read the details of the agreement carefully. Each contract will outline what happens if you let your contract lapse. The contract will state how the post-term rate will be determined, and some suppliers will even disclose the amount that they will add to the market price. It’s best to look for agreements that specifically detail how the rate will be calculated. Many suppliers, however, leave this section vague, which allows them to charge rates at their discretion.
Watch Energy Futures
Paying close attention to the energy futures market is a great way to stay on top of your contract renewal. If you see that futures prices are trading low, you can even renew your contract when it has many months left until expiration. Some suppliers will even allow you to negotiate a blend-and-extend contract, which permits you to extend the term of your contract based on lower market prices. It is recommended that you hire an energy broker to help you through this process as it can be complex and confusing if you have little energy market experience.
Do You Need Help With A High Energy Bill?
At Diversegy, we have deep relationships with the nation’s leading energy suppliers. We have helped many commercial customers through problems such as high, variable rates, and have been able to negotiate favorable terms on their behalf. Contact our team of energy contract experts today for more information.
