Starting today, June 1, energy suppliers will calculate cancellation fees differently when a fixed-price, fixed-term contract is terminated early. This signifies a breach of contract by the customer. This concerns contracts entered into as of June 1 this year.
The new calculation method offers energy suppliers more certainty: after all, energy has been procured at a certain price, assuming that the customer will purchase it and pay for it throughout the term of the contract. If the customer breaks the contract and the market price is lower than agreed upon, the energy supplier is left with the more expensive energy purchased. If the market price is equal or higher, the termination fee will be zero.
Only fixed-price, fixed-term contracts can have a cancellation fee. Variable price contracts, dynamic price contracts, or contracts with a monthly termination cannot have a cancellation fee.
This means less financial risk for energy suppliers, which in turn makes it possible again to offer an attractive price for a fixed term. The new rules on cancellation have been stipulated by the Authority for Consumers and Markets (ACM).
The cancellation fee amount depends on three factors: the remaining annual consumption, the price of the current contract, and the reference price. The latter is the price valid for a similar contract (same term, etc.) at the time of switching. The energy supplier will inform the customer upon request, or after the customer cancels, how much the cancellation fee is, if any. If the customer does not cancel, the energy supplier will inform the customer of the cancellation fee amount after receipt of the notification that the customer is switching and within the legal cooling-off period of 14 days. In all cases, the customer can still choose not to switch and politely continue with their existing contract.