Three Great Reasons to Watch Your (electricity contract) Language


Some residential and commercial electricity contracts are as raunchy as modern fiction, and subsequently also contain 50 shades of well…gray. Some contracts have language that is so confusing there seems to be no point. But it might behoove you to look for some key “gotchas.” Let’s take a look at some little paragraphs in that electricity contract “Terms and Conditions” section that can er… bite you.

Early Termination Language (ETF) and End of Contract Language:

It is very important to read about what happens as your contract ends, or if you need to end it early. Residential plans are notorious for charging a hefty month to month rate after your contract ends. To avoid this, be sure to switch providers or sign a renewal in time! Be sure you know what will happen if you terminate early or switch before your contract is up. For residences it should not be much. Say, around $100. But for businesses, ETFs or Contract Ending Language can devastate your budget:

This scenario happened to a lady I heard from this past June – She signed an electricity deal for her theater in New York.  She enjoyed a nice low electricity rate for 18 months, then BAM! She got slapped with an extra $10,000 on a bill that she was not expecting and worst of all, it was perfectly legal. All the savings she thought she was getting out of her nice low rate was gone in a blink. If someone tried to tell her to watch her language at that point, they might get a colorful earful and I don’t blame her!

The “gotcha” language that “got her” in the end was neatly nestled in her contract.

Before I go on, let me state here that electricity suppliers are not always malicious money suckers.  You can read more about the reasons suppliers do what they do in that article, but back to my story. Her dirty contract stated that they could charge her 150% of her current rate if:

  • 60 days from her end date, if she did not send in writing (not email! I mean writing with a PEN and a stamp and yes…a mail person) to the address provided in the termination clause, a notification that she wanted her contract to actually end when it is over, they will charge her a month to month fee of 150% her current rate until she switched providers or signed a new contract with them.
  • And by the way, she was not able to sign a renewal contract with them as they were not offering contracts in her territory currently. They said the area was “too volatile.”

She threatened a PUC complaint and I hope she will get her refund,  but often these things are unfortunately the buyer’s problem unless they have a good broker to help resolve the dispute.

Bandwidth provision, also called Swing:

Bandwidth provisions  or “Swing” clauses in commercial deals say that if you use 20% or more electricity than they expect to,  based on your historical usage, then you’re charged a lot more for it on top of their rate per kWh. That holds true if you use too little power too. Basically if your usage “swings” too far from your status-quo you are penalized. They will then charge you for what you DIDN’T use. There are reasons suppliers do this but 100% bandwidth can be negotiated if you have a good broker.

In residential contracts, you pay a different amount depending on how much electricity you consume. Look at the energy facts label for the deal you are considering before signing up to make sure the price in your tier will work for you! Click here to look at competitive residential rates.

Meter Fees:

Nothing is quite so irksome as meter fee language which is usually nestled into the pricing sheet or on the signature page of a commercial contract. In residential contracts, in exchange for the sheer joy of being their residential customer (ouch), you are required to pay ten to fifteen bucks per meter  per month,  just because. I would rather give flowers just because.

Own a larger business? Try to avoid paying these nasty little fees if you are a large commercial business who can negotiate them out as part of your deal. Small businesses might be stuck with them. Just make sure the savings is still there when you tally up your cost per year.

Price: Here is a bonus 4th tip. Price is usually not in your “Terms” pages, but you should still take a hard look at what your price IS. Did you know a Caesar Salad often has more calories than a cheeseburger? Prices are as deceptive as a Caesar salad.

Want a broker you can trust to get you the best deal for your business? Shop My Power is on it. Enter in your residential zip code  or fill out our commercial form and we will get started finding you a great rate with a clean expletive-free electricity or natural gas contract today.


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