Signing a contract with electric providers in NJ doesn't mean you're set for life. There may come a time where you wish to cancel your contract and switch to a different supplier. Likewise, there may be instances where your provider wants to cancel your contract and shut off your service. This usually only happens when bills are consistently underpaid or missed. The purpose of this article is to explain electricity cancellation to you in more detail so you can understand it better. We will talk through your rights, some of the fees you might have to pay, and the costs of canceling a service. Feel free to carry on reading and find all of the information you need:  

Consumer Rights

To begin, it's important you have a brief understanding of your rights in this position. Every consumer is allowed to cancel their contract with a New Jersey electricity company at least once per year. Similarly, your electricity supplier can't cancel your contract for no reason whatsoever. For example, they can't cancel your contract if you don't pay repair charges, merchandise charges or yellow page charges. They can only cancel when you don't pay charges on your actual electricity contract with regards to the unit price, etc. You also have the right to budget billing plans if you find your current payment method is too hard on your finances. This can help many people avoid cancellations and fees.

25% Rule

If your electricity is about to be shut off and your contract canceled, the supplier will often demand that you pay a portion of your final bill. What they don't say is that you only have to pay 25% of that bill. Sometimes, they'll quote a larger price, but, you should ask them about the 25% rule. This means you'll only have to pay 25% of your final bill, as opposed to how much they demand. In instances where your supplier threatens to cancel your contract, you can pay this 25% to avoid the shut-off.

Supplier Fees

If you are canceling your electricity contract yourself, then you will have to abide by the specific rules your supplier provides you with. All the cancellation details will be written for you in your contract when you sign it. It's important that you look through them and understand when you can cancel and how much it will cost you.

Naturally, the fees may differ from company to company. However, the general consensus is that you don't get charged a cancellation fee if you have a variable contract. Many suppliers will charge you a fee of around $50 if you have a fixed contract - again, this can vary from supplier to supplier, make sure you read all the relevant information before you sign a contract to begin with.

The main things to take away from this piece are that you're entitled to cancel your contract, and shouldn't be forced to pay more than 25% of your bill if your supplier cancels your contract. It's important to understand your consumer rights regarding electricity cancellation as some companies may try and charge you fees that you don't have to pay.