There might be a time when you want to cancel your electricity provider contract before it comes to an end. If you want to cancel, it is important to understand the rules about cancellations first. Electric providers in NY must follow the Home Energy Fair Practices Act (HEFPA). This is a set of rules that dictates how these companies must behave and treat their customers fairly. You should also understand the ESCO Consumer Bill of Rights. One of the things this set out is the rules on cancellation fees. The change to the law in 2010 improved rights for consumers. It gave set amounts that energy providers could charge for cancellation in New York.
UBP Section 5.B.4.b is the relevant part of the Uniform Business Practices that dictates cancellation fees. It says that your energy provider cannot charge more than a certain amount. The fee depends on the length of the contract that remains. If there are less than 12 months left on a contract, they cannot charge more than $100. If more than 12 months remain for the contract,t they can only charge up to a $200 fee. Alternatively, they can ask for twice the cost of a bill for the average month. However, they can only do this if a copy of the average bill is sent to the customer. It must include information about cancellation fees.
The electricity provider can calculate an average bill by looking at your energy usage over the last 12 months. If that information isn't available, they can use the usage of a typical customer. This is multiplied by the electric provider's average annual rate to work out a monthly rate. This could mean that the cancellation fee is higher than you might expect. If the fee is based on your own electricity usage, it could be high if you use a lot of energy.
Cancellation fees are often charged for fixed-rate contracts that you end early. However, a variable-rate or month-to-month contract is less likely to have any cancellation fees. It may be a better choice for anyone who wants to avoid making the commitment of a fixed contract. You won't benefit from fixed rates but will be able to get out of the contract at any time without any penalties.
It's essential to understand any fees or payments you might have to make to your energy supplier. Before you sign a contract, make sure you know how they will charge a late fee if you want to cancel. You will likely be charged one if you want to end a fixed-rate contract before the time is up. Your contract might set out how the cancellation fee will be charged. The supplier may express that they will charge you based on a monthly bill, rather than the set limits.
Knowing your consumer rights helps you to make a more informed choice when you shop for electricity suppliers. If you want to cancel your contract, don't forget to check the rules so you can ensure the supplier is following them.