Some retail energy contracts have a rule called a rescission period. This rule lets you cancel the contract before it begins. This article explains what you should know if you want to cancel your energy supply agreement at the last minute. If you just signed a retail energy contract and want to cancel it, you may be in luck. Some states allow a rescission period. This means you can end the contract without paying early termination or exit fees. This article explains how rescission language works in energy contracts. It gives you the information you need to decide if you want to cancel. If you are not sure what to do, it may help to hire an energy broker or consultant. They can guide you through your choices.

What Is the Rescission Period?

You may wonder if you can cancel your energy contract before it starts. The simple answer is: it depends. Several things decide if a rescission period applies. These things also decide how long the period is and how you can cancel the contract early. Here is what you should think about:

Commercial Customers vs. Residential Customers

In many deregulated energy states, the Public Utility Commission or other regulators see residential customers as a protected group. Because of this, most residential energy contracts include a rescission period. This means the customer can cancel early. The rescission period is usually between three and seven days. It lets the customer end their energy plan with no fees and no obligations. Many residential contracts also do not have early termination fees. In those cases, a customer can often cancel at any time with no penalty. Commercial customers are treated differently. Most commercial contracts do not offer a rescission period. If they do, the cancel window is very short.

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Contract Start Date

Many customers who sign up for an energy plan with a future start date think they can cancel before it begins. This is not true. Energy suppliers with fixed rates must buy energy in advance for the customer. This is needed to guarantee the fixed price. Because of this, future-dated energy contracts cannot be canceled unless they are done during the rescission period.

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Rescission Period Examples by State

The time to cancel a contract (rescission period) is different in each state. It can be as short as 3 days or as long as 15 days. Some states count calendar days, some count business days, and some skip Sundays or holidays.

Longest periods: Alaska and Delaware give 15 days.

• Alaska starts counting after buyers get disclosure documents.
• Delaware starts from the contract signing date.

Shortest periods: Indiana gives only 3 days (72 hours).

• Kansas, Kentucky, Massachusetts, Nebraska, Ohio, and Vermont also give 3 days.

Middle periods:

• California gives 7 calendar days from signing or getting disclosure documents.
• Florida gives 10 days from signing or getting the required documents.

Special counting rules:

• Georgia skips Sundays and holidays in its 7-day period.
• New York counts only business days.
• Michigan gives 9 business days, which can be almost two weeks if weekends are included.

Note: Rescission periods are strict, but the right to cancel depends on each state’s laws.

If you want, I can make an expanded version including the other states you mentioned earlier, like Kansas, Kentucky, Massachusetts, etc., so it’s a full U.S. reference table.

How Does Rescission Work?

A fixed-rate energy contract has a start date, end date, and length (in months). 

If the contract includes a three-day rescission period, the customer can cancel within three days of signing. After the rescission period ends, the contract is official. Leaving the contract early after that may cause fees or penalties, as explained in the contract.

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Early Termination Penalties

The highest cost for leaving an energy contract early is the early termination fee. For commercial customers, these fees can be very high. Many commercial agreements make customers pay for the energy left in the contract. This can cost tens of thousands or even hundreds of thousands of dollars. Residential contracts usually have smaller cancellation fees. These are often fixed amounts, like $100, $500, or $10 per month left on the contract.

Tips for Avoiding Energy Contract Problems

The last thing you want is a problem with your energy supplier. Problems can be expensive for your home or business. Follow these tips to avoid issues with your energy provider:

Read the Contract Terms

Take time to read your contract carefully. Look closely at the early termination rules and rescission period. This will help you understand what you are agreeing to.

Know Your Renewal Date

Know the length of your energy contract and when it ends. This helps you avoid leaving too early and paying an early termination fee (ETF).

Use an Energy Broker

If you are buying energy for your business, it helps to use an energy broker. Some people debate whether brokers are good or bad. But energy brokers give customers an advantage because they are experienced and can guide you through the process.

How to Cancel Your Contract (Right of Rescission)?

You do not have to give a reason when you cancel your contract. But sometimes, you might want to say why, for example:

• Your money situation has changed, and you cannot afford the loan.
• You found a better deal from another lender.
• You just changed your mind.

If you want to cancel your contract, follow these steps:

Sign and send your notice.

There is no one way to do this. Lenders must tell you how to send it. They must also give you an address. If they did not, send it to the address for monthly payments.

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Keep Proof

Your request counts when you send it. Keep proof that you sent it in the three-day window.

Wait For a Reply

The lender must refund any costs you paid within 20 days after getting your request.

Return Any Money or Property

If you got money or property from the deal, you can keep it until you get your refund. After that, you must return it.

Need Help Rescinding A Contract?

If you signed an energy contract but want to cancel, we can help you. Depending on the terms of your contract, your customer type, and the energy supplier with whom you contracted, there could be hope to rescind your agreement. Great Energy 1 works with the nation’s leading energy providers and helps our commercial customers find low-cost energy supply. Contact us today for a consultation.