By AJ Brockman
If you want to switch energy suppliers, there’s one section of your current energy agreement that you need to look at first: the “term” or “delivery period.”
The “term” or “delivery period” section contains auto-renewal language, which is a standard part of any energy contract.
Usually, this clause states that the contract will automatically renew for a certain amount of time (ex. 12 months) on a variable or holdover rate unless you submit a notice to terminate in specified terms (ex. 60 days) before your contract expires.
For a smooth supplier switch — and to comply with the terms of your agreement — there are two documents you need to submit to your current supplier: a non-renewal notice and a termination letter.
What is a non-renewal notice?
A non-renewal notice (sometimes called a “Notice to Shop”) tells your current supplier that you intend to shop for rates and you don’t want your contract to automatically renew.
This notice can be retracted and does not automatically terminate your service if you decide to renew with your current supplier.
- See a sample non-renewal letter here.
When should you submit a non-renewal notice?
You should submit the notice as soon as you decide to shop for rates — which should be at least 6-9 months before your contract expires. This ensures that your accounts don’t automatically rollover while you’re shopping, and you’re following your contractual obligation to give formal notice.
What is a termination letter?
A termination letter notifies your current supplier that you will be using a different energy supplier when your contract expires. It clearly outlines which account numbers and service addresses you wish to terminate.
The letter also states that you are not responsible for any energy delivered to your accounts after your termination date.
- See a sample termination letter here.
When should you submit a termination letter?
You should submit a termination letter after you sign an agreement.
Note: it is imperative that you submit the termination letter before the deadline that’s stated in your contract. This may require you to submit it before you sign a new agreement.
This deadline varies by supplier — some want the notice 60 days before your contract expires, others require 90 days or even 6 months’ notice.
If you submit the termination letter after this deadline, you could encounter issues or even termination/liquidation fees if the contract has already renewed.
What is the process for drafting a non-renewal or termination letter?
If you’re working with an advisor, we’ll draft up the letter for you that includes all the necessary information (account numbers, service addresses, supplier address, etc.).
When we send it to you, you should copy it onto your company’s letterhead and sign it.
To submit the letter, you can either send it to the supplier yourself or send it to us — we’ll send it to the supplier on your behalf. If you choose to send it yourself, we recommend faxing or emailing a copy to the supplier in addition to mailing it.
Ask your broker or advisor how to switch energy suppliers.
These documents are necessary for switching suppliers and submitting them on time will make the switching process seamless. Ask your broker or advisor for templates and guidance.
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