Posted by Shane McLaughlin
on 07/02/2012 at 8:30 PM
Just like cell phone contracts, leases and other agreements, electric plans can come with cancellation fees (also known as early termination fees
For fixed rate plans
, there are two key types of cancellation fees:
- A fixed amount fee for cancelling anytime during the contract, even if the contract period is almost finished.
- A fee based on how many months remain in your contract. This type can be less expensive if you're approaching the end of your plan.
For example, if you switch to a 12-month plan but decide to cancel in month nine, you would only owe a fee for the three months remaining on your contract. Typical costs are between $20 - $25 per-remaining month.
Here's a breakdown of 143 fixed rates plans that are available in the Houston territory.
As you might expect, the longer the contract, the higher the cancellation fee tends to be.
The chart below shows different contracts available for Houston customers along with the range of cancellation fees. Even though there are some extremes, you can see that the average
(shown by the blue line) doesn't move all that much.
As an example, breaking a three-month contract could cost between $50 and $175, but breaking a three-year contract could cost $150 to $350!
The other thing for smart consumers to be aware of is how much variation there is in the cancellation fees. If you're choosing between two similar rates, the extra $150
for cancellation might make your decision easier.
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