Comprehensive Guide to Early Termination Fees in Electricity Contracts

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So, you want to switch electricity providers in Texas to get a better rate but you’re still under contract with your current provider. What can you do? What options do you have? Here’s everything you need to know about early termination fees, also known as “ETFs” or “early cancellation fees.”

Understanding Early Termination Fees

Long-term contracts often come with benefits, but they also have drawbacks, especially if you want to switch to a better deal before your contract ends. Seeing a great offer from another provider and not being able to switch due to your current contract can be frustrating. It’s even more annoying if your current provider isn’t meeting your expectations. But don’t worry, there are ways to navigate this situation.

How to Avoid Cancellation Fees

The obvious approach to avoid paying early termination fees is waiting until the end of your current contract. In Texas, you can avoid this fee by switching within 14 days of your contract expiration date. But if the deal is so good that you can’t wait to switch, then you’ll have to take out your trusty calculator and start doing some math to see if it makes financial sense for you.

Should You Pay the ETF

Wondering if it makes sense to pay the early termination fee involves a few key considerations. Start by calculating the potential savings from switching to a new electricity provider with a lower rate. Compare these savings to the cost of the early termination fee. If the savings over the remainder of your contract exceed the fee, it may be financially beneficial to switch. Additionally, consider any non-financial benefits, such as improved customer service or better plan features, that the new provider offers. Weigh these factors carefully to make an informed decision that maximizes both your financial savings and overall satisfaction.

Evaluating Early Termination Fees When Selecting a Provider

When selecting a new electricity provider, one key component to compare is the early termination fee. This fee can significantly impact your overall savings if you decide to switch providers before your contract ends. Start by researching and comparing the early termination fees of different providers. Consider the length of the contract and the likelihood of needing to switch before it ends. Weigh these fees against the potential savings and benefits of a new provider. By understanding and evaluating early termination fees upfront, you can make a more informed decision and avoid unexpected costs down the line.

Early Termination Fees: What to Expect

When you hear “cancellation fee” or “early termination fee,” you might imagine a hefty charge designed to prevent you from switching. Which, in most cases, you are correct in assuming that. However, for some electricity providers, these fees are usually more manageable. Most Texas energy providers charge between $150 – $400 depending on the contract length, though there are exceptions. One of the newest trends we are seeing, especially from the providers that are more customer-friendly, charge a flat fee for each month remaining on the contract.

Early Termination Fees by Retail Electric Provider

Cancellation fees vary among energy providers. Here’s a breakdown of what each provider typically charges for standard 12-month plans. If you’re on a longer contract or received promotional items as part of your deal, higher fees may apply.

4Change Energy logo, a residential electricity provider and partner of Honest Gorilla4Change Energy$20 per month remaining on the contract
Frontier Utilities logo, a residential electricity provider and partner of Honest GorillaFrontier Utilities$150
Gexa Energy logo, a residential electricity provider and partner of Honest GorillaGexa Energy$150
Chariot Energy logo, a residential and commercial electricity provider in Texas and preferred partner of Honest GorillaChariot Energy$15 per month remaining on the contract
Rhythm Energy logo, a residential electricity provider and partner of Honest GorillaRhythm Energy$20 per month remaining on the contract
APGE logoAPG&E$150
BKV Energy logo, a residential electricity provider and partner of Honest GorillaBKV Energy$20 per month remaining on the contract
Pulse Power logo, a residential and commercial electricity provider in Texas and preferred partner of Honest GorillaPulse Power$20 per month remaining on the contract
New Power Texas logo, a residential electricity provider and partner of Honest GorillaNew Power Texas$20 per month remaining on the contract
Shell Energy logo, a retail electricity provider in Texas and partner of Honest GorillaShell Energy$149
All early termination fees depend on the plan selected and are subject to change from time-to-time.

Cashback Deals and Early Termination Fees

If you received cashback or a gift card as part of your electricity plan, be aware that most providers reserve the right to reclaim this if you cancel before the end of your contract. You will want to read your Terms of Service and Electricity Facts Label to better understand how it works and what you have to lose in case you want to cancel.

Moving Homes and Early Termination Fees

Typically, you won’t have to pay a cancellation fee if you’re moving residences. You have the option to transfer your contract over to your new home or apartment, especially if it’s a good deal, but you don’t have to. If you wish to get out of their contract, for any reason, you may do so without any penalty.

If you’re skeptical and don’t want to take our word for it, according to a ruling by the Public Utility Commission of Texas, Section §25.475(c)2(C) of the Customer Protection Rules, it states, “A contract is limited to service to a customer at a location specified in the contract. If the customer moves from the location, the customer is under no obligation to continue the contract at another location. The REP may require a customer to provide evidence that it is moving to another location. There must be no early termination fee assessed to the customer as a result of the customer’s relocation if the customer provides a forwarding address and, if required, reasonable evidence that the customer no longer occupies the location specified in the contract.”

Ready to Switch?

Switching providers is the quick and easiest way to save on your electricity bills. Customer loyalty isn’t what it used to be. If you’re out of your contract, you could save an average of 30% by switching today and using Honest Gorilla. Our platform makes it easy for you to compare the best deals from all the energy providers we work with in Texas.

To switch, you’ll need:

  • Your ESI ID (Electric Service Identifier)
  • An estimate of your monthly energy usage (bonus points if you have 12 months’ worth of actual usage data)
  • Some personal details

For more information on switching providers, read our comprehensive guide on what you need to switch providers.

Switching with Honest Gorilla is straightforward and can be done in just a few short minutes. Start your journey towards cheaper electric bills today!

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