Your electric supplier contract is ending: what happens next

A letter comes from the company that sells you electricity. It says your contract is ending, or that it will "renew." It is easy to set it aside. Please don't. This letter can decide what you pay for the next year.

Here is what the letter means, what the rules say in your state, and what to do before the date.

First, a few words

• Your utility is the company that brings power to your home, like AEP Ohio, PECO or ComEd.
• A supplier is a company that sells you the electricity itself. If you signed a contract with one, it sets your price. Your utility still delivers the power.
• Your standard price is what your utility charges if you never pick a supplier. For electric, all three states call it the Price to Compare.

What will the letter look like?

Suppliers have to warn you before a contract ends. The name of the letter depends on your state:

• Ohio: the front of the letter must say "Important notice regarding your electric service contract's expiration."
• Pennsylvania: you get two letters. The first is an early notice. The second is called an options notice. It lists your choices.
• Illinois: if your plan renews on its own, the envelope or email subject line must say "Contract Renewal Notice."

Keep these letters with your bills. They show the new price.

Ohio rules

Ohio's rules are in Ohio rule 4901:1-21-11 (opens a new tab).

• When the letter comes: between 45 and 90 days before your contract ends.
• What it must show: the price your contract will renew at. If the new price is variable (it can change), the letter must give the formula used to set it.
• Plans that renew on their own: these are allowed. But if the new contract has a fee to leave of more than $25, or no way to leave early, the supplier must point out the changes and get your OK first. If you don't answer, you go back to your utility's standard price.
• Plans that don't renew: the letter must say you will go back to your utility's standard price if you don't sign up again.

A warning from the Ohio Consumers' Counsel (OCC), the state office that speaks up for home customers: many contracts "automatically renew to significantly higher monthly variable rates at the end of the contract period if the customer does not follow up."

Gas in Ohio works in a similar way. The first letter comes 45 to 90 days before the end. A plan that renews on its own may bring a second letter at least 35 days before the end, with the new price. And a renewal can't be longer than your first contract. That is Ohio rule 4901:1-29-10 (opens a new tab).

Pennsylvania rules

Pennsylvania's rules are in 52 Pa. Code § 54.10 (opens a new tab).

• The first letter: comes 45 to 60 days before your contract ends.
• The options notice: comes at least 30 days before the end, by first-class mail. It must show the new price per kilowatt-hour (kWh). A kWh is one unit of electricity.
• No fee to leave near the end: from the day the options notice is sent until the contract ends, you can leave with no fee. The state's shopping site puts it simply: "Early cancellation fees do not apply in the last 30 days of your contract – so you are free to shop during this time."
• If you do nothing: your fixed contract turns into a month-to-month plan, or another plan you can cancel at any time. Either way, it can't have a fee to cancel. The state's site says you will stay with your supplier "on a month-to-month basis without any early termination fees, but most likely at a different rate."

Illinois rules

Illinois' rules for plans that renew on their own are in 815 ILCS 505/2EE (opens a new tab).

• When the letter comes: "at least 30 days before, but not more than 60 days prior, to the end" of the contract.
• What it must show: for a fixed price, a side-by-side look at your current price and the new price.
• Fixed can't quietly turn variable: a fixed price can't renew as a variable one unless you agree to it in writing or by electronic signature, 30 to 60 days before the contract ends.
• No fee to leave: since January 1, 2020, Illinois home customers can leave an electric supplier "at any time without any termination fees or penalties." That is state law, 220 ILCS 5/16-119 (opens a new tab).

What are my choices?

In every state, you have three choices.

1. Stay with your supplier at the new price, or pick another plan from the same company.
2. Pick an offer from another supplier.
3. Go back to your utility's standard price.

To decide, compare each choice with your utility's standard price. Look at the price per kWh, any monthly fee, how long the plan lasts, and the fee to leave early. If nothing beats the standard price after fees, going back is a fine choice.

A note for Illinois: the state says your utility won't charge you to go back, but "you may have to stay with the electric utility for at least 12 months."

What happens if I do nothing?

It depends on your contract and your state.

• Ohio: if your contract renews on its own, you stay with the supplier at the new price. That price may be variable. If your contract does not renew, you go back to your utility's standard price.
• Pennsylvania: you stay with your supplier on a month-to-month plan (or another plan you can cancel any time), with no fee to leave. The price will most likely be different.
• Illinois: if your plan renews on its own, you stay at the new price. But a fixed price can't become a variable one unless you agreed in writing.

The biggest risk is a price that changes every month and keeps climbing. The OCC has warned that some of these rates "can be more than twice the price of the utility's Standard Offer." If that has already happened to you, see My electric bill jumped. Is it a variable rate?

Is there a fee to leave near the end?

• Ohio: the OCC says "There is no early termination fee when returning to the local utility's Standard Offer at the end of a marketer contract." (A "marketer" is another word for a supplier.) If you want to leave earlier, check your contract for a fee first.
• Pennsylvania: no fee from the options notice until the end date.
• Illinois: no fee at any time for home electric customers.

For more on fees, see Early termination fees and how to leave an energy supplier.

Do it before the date

Switching doesn't happen overnight. In Ohio, the OCC says it can take "up to two to three billing cycles" for a switch to show on your bill. So act when the letter comes, not on the last day.

When you call, write down the date, who you spoke with and any number they give you.

What to do next

• Run the free check as soon as the letter comes. Send a photo of your bill, and I'll compare your new price with your standard price and every offer for your area, fees included.
• See live prices for your state: Ohio, Pennsylvania or Illinois.
• New to suppliers? Read Should I switch electric suppliers? and Is it safe to switch my electric supplier?
• Who to call:
  • Ohio: PUCO at 1-800-686-7826, or the Ohio Consumers' Counsel at 1-877-742-5622
  • Pennsylvania: PA PUC at 1-800-692-7380, or the Office of Consumer Advocate at 1-800-684-6560
  • Illinois: Illinois Commerce Commission at 1-800-524-0795, or CUB at 1-800-669-5556

Judy Saves is not part of any state agency or utility, and I don't sell electricity. I'll never call you or knock on your door.