The Consumers and Markets Authority (ACM) wants to adjust the rules for terminating fixed energy contracts.

Currently, customers who have a fixed energy contract and want to get rid of it pay a fixed cancellation fee. That is, for example, 50 euros for electricity and 50 euros for gas if the contract has less than a year and a half remaining. If ACM has its way, the severance payment is variable: it can also be significantly higher.

ACM believes such variable compensation may encourage energy companies to resume offering perpetual contracts. Companies have been calling for higher severance pay for some time.

Loss

Energy companies no longer offer fixed energy contracts. They fear that people with a permanent contract will immediately switch to another provider as soon as energy prices fall again. The energy company then bought electricity for these customers at high prices and a cancellation fee of 50 euros is not enough to compensate for this.

In ACM’s proposal, the termination fee accounts for the harm the supplier suffers when someone terminates the perpetual contract. Although this makes the termination of a permanent contract more expensive for customers, ACM hopes that this will at least result in a renewed conclusion of a permanent contract.

“Especially in times of strongly fluctuating and high prices, it is important that consumers can opt for the security of a contract with a fixed term and fixed price,” writes the regulatory authority in a press release.

Energy suppliers and consumer organizations will be able to react to the plans in the near future. ACM wants the changes to go into effect on January 1, 2023.