Is a contract right for you?
Why a contract may be better for you
- Contracts can provide peace of mind by locking in a price. As with fixed rate mortgages, these contracts can provide you with stable energy prices over the length of the contract.
- Fixed price contracts may protect you against short-term price spikes resulting from natural events such as hurricanes and earthquakes.
- Retailers may offer customers incentives to sign contracts.
- Some retailers pass along administration cost savings if consumers sign a contract for both electricity and natural gas.
Why a contract may not be right for you
- Depending on the terms of your contract, you could remain locked in at the contract price for the term of the contract even if the rates subsequently drop.
- Some retail offers include early exit fees if you terminate a contract before the end of the term. You should be aware of how the early exit fees are calculated as they can amount to several hundred dollars – depending on the remaining term on the contract.
- An energy contract is a legal commitment between you and the retailer and stays in force until the expiry of the contract. If you are at a stage in your life where – because of health or other reasons – it may be difficult for you to make long-term commitments, then the option to sign a contract should be weighed carefully. For example, if you move to a new location in the province where utilities are included in the rent, early exit fees may apply.