There could be several reasons for wanting to cancel your energy contract. You might be moving business premises, selling your business, or looking to switch energy suppliers. If you are in the middle of a business energy contract and are looking to terminate the agreement with your retail energy supplier, you might be facing an uphill battle. However, there are several options available to you that we will outline below. This article details energy contracts, early termination penalties, cancelation options, energy contract language, and other alternatives for terminating your business energy contract.
Why Businesses Would Cancel A Business Energy Contract
There are several valid reasons why you might want to terminate your business energy contract. From moving locations to problems with energy suppliers, business owners might be looking to get out of their agreements early. Here are some of the top reasons we see customers wanting to cancel their contracts.
Moving Business Premises
The number one reason is that the business is moving premises. Now, if your business is moving to a new location within the same utility territory, you might be able to transfer your contract to the new location. However, if it is outside of that footprint, most businesses need to cancel their contract early.
Buying Or Selling A Business
If you are buying a new business, or selling your business to someone else, you need to address any energy contracts that might be associated with the business. Most retail energy suppliers will allow the new business to take over the active contract by completing transfer paperwork. The buyer of the business, however, might not want to assume the contract and in that case, the seller needs to cancel the contract. It’s important to manage energy contracts when buying or selling a business.
Energy Scams or Fraud
Another common reason to cancel an energy contract is energy scams or energy fraud. Unfortunately, some customers experience many problems with energy suppliers, and if your utility account was signed up to a contract without your permission, you should have every right to terminate the energy contract.
Lower Energy Prices
If you signed up for a fixed-rate energy contract and energy index prices fell, you might be wanting to cancel your contract so you can get a lower rate. This is quite common, but unfortunately very difficult to achieve. Most retail energy contracts have heft early termination penalties to deter customers from doing just that.
Terminating Your Energy Agreement: What You Need To Know
WARNING! Canceling your energy contract early can come with hefty penalties and fees from energy suppliers. It’s best to look at the terms and conditions of your contract before taking any action. We also suggest that you consult with an energy professional before making any decisions. Here are some of the things you need to consider before terminating your contract.
Early Termination Fees
Most retail energy contracts have early termination fees and penalties if the customer cancels or breaks the contract before it expires. And, with commercial energy contracts, these fees can equal the cost of the total amount of energy remaining on the contract. It is important to calculate these fees before attempting to cancel your contract.
Rescission Periods
In some states, there is a small window after you sign a new energy contract where you are allowed to rescind or cancel the contract without penalty. If you just executed a new contract and want out, check the terms and conditions of your agreement. If there is a rescission period in your energy contract, then you might be in luck!
Blend & Extend
If your reason for canceling your contract is that energy prices are lower and you want to save more money, you might be able to exercise a blend and extend of your existing contract. A blend and extend energy contract can happen when energy market conditions change. The retail supplier will sometimes allow the customer to change to a lower energy rate in the middle of a contract as long as the customer agrees to extend the contract for a longer period.
How To Terminate Your Contract
Although we never suggest terminating an energy contract without consulting with a professional energy broker first, you can do so by contacting your energy supplier with whom you have the agreement. Now, if you hired an energy broker to negotiate with energy suppliers on your behalf, it is best to use your energy broker to negotiate the termination on your behalf.
Do I Need An Energy Broker?
While you can certainly negotiate with the energy supplier yourself, using an energy broker has many advantages:
- The broker has relationships with the energy suppliers and might be able to call in favors on your behalf.
- The broker knows the ins and outs of energy market prices and energy contracts and might be able to help you cancel without a termination penalty.
- The broker can help you transfer your contract to a new location or to the buyer of your business.
Thinking About Canceling Your Energy Contract? Contact Us Before You Do!
Canceling energy contracts can have serious legal implications and financial consequences. It is very important to consult with a professional energy brokerage firm and weigh your options before you attempt to cancel your contract. If you need help understanding the terms of your agreement or want to know your options for canceling, contact our team of energy experts today!
