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Can I Cancel my Business Electricity Contract?

When you sign up with an energy supplier, you have a contract and agree to a set amount of time to pay either a fixed rate or variable tariff for the power your company uses.

There are a few reasons why you may feel the need to cancel a business electricity contract. We discuss them here:

Terminating at the end of a contract

If you don’t stop your current agreement, your supplier will extend it at a vastly increased rate. This can be at as much as 30 per cent.

Failing to exit your contract means you’ll experience substantial increases in both the unit rate and the standing charge – and you don’t want that.

In the worst case, if you haven’t signed a new contract and you don’t want to continue with your existing supplier, you get stuck in between energy rate worlds. These ‘ out-of-contract’ rates mean you’ll get the most expensive tariffs available and you’ll continue to pay these until you sign up with your new supplier.

When your contract is coming to an end, look at an energy comparison tool to make sure you are getting the best value for your money.

Being mis-sold a contract

If you agreed to a business energy contract over the phone, this may well have been mis-sold. You may have:

• Moved into new premises and were called over a dozen times a day about the supply and find yourself in a verbal agreement

• Signed a broker’s Level 2 letter of authority, which means they can sign contracts on your behalf without telling you first

• Were told you needed a new energy contract urgently and you agreed as you were panicking without checking prices

If any of these scenarios have happened to your company, contact an energy broker who will be able to advise you on your next steps. You may need evidence of calls, paperwork or contracts.

A contract termination letter is another way to give cancellation notice. This will also confirm the minimum period of notice that the supplier requires. Between 30 and 120 days is standard.