You’ve probably found that switching electricity providers is an easy process, but there are still a few things to keep in mind as your contract approaches expiration.
In most cases, when your contract expires, you are not suddenly switched back to your default utility’s rates. Instead, you will most likely be switched to your provider’s variable rates, which can be much higher than what you were paying. We recommend that you start shopping around again at least a month prior to your contract’s expiration in order to avoid sudden rate increases.
The shopping-around process is much like what you did – or should have done – when you chose your current retail electricity provider. Look for low rates, a duration that you’re comfortable with as well as other incentives. Learn more here.
Perhaps you believe that signing a new contract with your current provider is the best bet. Before you consider doing this, ask yourself:
1. Were your rates below the utility’s Price-to-Compare? Did you save?
Your utility’s Price-to-Compare (their average rate) is guaranteed to fluctuate at least every six months, sometimes even monthly. It’s important to calculate your savings based on the entire duration of your retail electricity contract. Find your utility’s Price-to-Compares for each month since your contract began, add them together, and divide by the number of months. Compare this rate with yours to find out the difference. Even a tenth of a cent can make a huge difference!
2. Were you charged the rate you were promised?
Unfortunately, some retail electricity provider’s sale people have been engaging in misleading tactics in order to recruit customers. For example, some sales people may promise low rates that won’t change, and then customers find themselves paying higher variable rates after some time. If you find that any of the providers listed on our website have dishonest business practices, please let us know. We work hard to provide you the best rates from honest providers.
3. Will the provider continue to offer you rates below your utility’s Price-to-Compare?
We can’t stress enough how important it is to pay attention to your utility’s Price-to-Compare when you are switching providers. Like most commodities, prices will fluctuate depending on supply and demand. Perhaps your utility’s rate is scheduled to drop in the near future. Will your current provider beat those rates?
4. Is there anything you didn’t like about your current provider?
Perhaps the sign-up process wasn’t easy, or you didn’t think the company’s customer service was up-to-par. Perhaps you chose the provider because of the incentives that they offered (e.g., free airline miles) and later found that the value didn’t match up to the cost.
How to Switch
In most cases, you’ll find that another provider has a better offer. You’ll switch companies the same way as you did before, by either contacting the new provider by phone or filling out their online form. Be very careful not to switch before your contract is expired because you’ll likely incur an early termination fee.
Let’s say your contract expires in two weeks, and you have decided that a new provider will better meet your needs. Go ahead and ask the new provider if they are able to sign you up but delay the switching until the day your contract expires. This allows you to avoid any high variable rates, and most providers will be happy to do this.
Use our free Compare & Switch Tool (at the top of this page) to view some of the best rates from honest providers in your area.