Can an energy company cancel a fixed tarrif?

HalloweenJack

Given the companies that are failing, with news that more could fail and soon - what is the likelihood , that a company can terminate a fixed rate tariff and a customer be forcibly moved to a different one?

beanielou

I suppose it all depends on the terms & conditions of the fix.

QrizB

Yes, this sounds like a contract law question. If the T&C allow the energy co to terminate the fix early, they can do it. If the T&C don't, they can't.

Liku

Would it not be like other services where they can do it but they have to give notice and allow you to leave if you disagree? Checked for the one I am now with (NR) and they say they wont but if any changes do happen that cause an increase you can leave without penalty. Even if a company puts it in their T&C it wont automatically allow them to do it.
Perhaps something like "It is X for 6 months then Y for the rest" at the start would be ok. 

QrizB

Liku said:

Would it not be like other services where they can do it but they have to give notice and allow you to leave if you disagree?

Only if that's what it says in the contract.

QrizB

frodo21 said:

No, not going to happen.

 

Shady Energy Ltd buys 1 years worth of gas at 3p for their 500k fixed rate customers, gas prices surges past 5p only 6 months later, Shady Energy could terminate all 500k customers "fixed" rate tariff, sell the remaining energy they bought (at 4p) through a new higher priced fix rate tariff, higher profits.

I see that shadyenergy.co.uk is available to register, if you want to give it a go

tghe-retford

I would.not be surprised if there is lobbying behind the scenes to allow this to happen on the grounds of exceptional circumstances, the alternative being a lot more companies fold and were left with the big six and not a lot else.

At this point, cancelling the contracts early and compensating consumers might be cheaper than allowing the contracts to run their course until the inevitable administration!

Going forward, expect fixed rate deals to be a lot less one sided toward the consumer where currently only they can legally exit the contract (exit fee or not). Higher exit fees could also be a possibility.

Curiousgirl1

Higher exit fees already happening. EDF are charging £100 per fuel on theirs 

[Deleted User]

Curiousgirl1 said:

Higher exit fees already happening. EDF are charging £100 per fuel on theirs 

Presumably, only for new fixed term contracts?

GingerTim

[Deleted User] said:

Curiousgirl1 said:

Higher exit fees already happening. EDF are charging £100 per fuel on theirs 

Presumably, only for new fixed term contracts?

Must be - my three year fix made in July is showing a £15 exit fee.

Ultrasonic

[Deleted User] said:

Curiousgirl1 said:

Higher exit fees already happening. EDF are charging £100 per fuel on theirs 

Presumably, only for new fixed term contracts?

Yes.

It's always struck me that exit fees have been very low and the £100 per fuel figures for a 3 year fix don't actually strike me as at all unreasonable. The company is making a true long-term commitment so why shouldn't the consumer?