Almost got taken for a ride by an energy broker working our Xcel Energy territory accounts here in Minneapolis. Contract looked reasonable on the surface - 3 year term, decent rates for Schedule C&I customers. But buried on page 8 was an automatic renewal clause for FIVE MORE YEARS unless we gave 18 months written notice. Who reads that far into these things? Good thing our legal team caught it.
Xcel Energy broker tried to slip in a 5-year auto-renewal clause
Christine, that's their favorite trick. Wisconsin Electric customers here in Green Bay see the same thing. These brokers bank on businesses not reading past the rate schedules and term length on page 1. I always tell my clients - if the contract is more than 3 pages, budget extra time to read every single clause.
Had Entergy Mississippi customers get hit with this exact scam. 3-year deal becomes an 8-year nightmare because of auto-renewal buried in subsection 12.4.c or some garbage. These brokers know exactly what they're doing. It should be illegal to hide contract extensions that deep in the fine print.
Same playbook everywhere. LG&E customers in Louisville have been getting burned by this for years. The worst part is these auto-renewals usually lock you into rates that were competitive 3 years ago but are garbage by renewal time. Market could have dropped 30% and you're stuck paying premium prices for 5 more years.
Sylvia here in Harrisburg with PPL territory. Our state AG actually went after several brokers for these deceptive practices. The settlement required them to highlight auto-renewal clauses in bold text and give customers annual reminders about opt-out deadlines. Wish more states would crack down like this.
Warren from Boise here. Idaho Power territory doesn't have much deregulation, but we still see these contracts for large accounts. My standard advice - any contract with auto-renewal gets a big red X from me. If the broker won't remove that clause, they're not working in your best interest.
Vivian in Corpus Christi with AEP Texas territory. We require ALL energy contracts to have calendar reminders set 18-24 months before any renewal deadlines. Saved us twice already when brokers conveniently "forgot" to mention upcoming auto-renewals. Simple but effective protection.
Cincinnati with Duke Energy Ohio here. Cecilia speaking - we actually negotiated a "get out of jail free" clause in our last broker contract. If rates drop more than 15% below our contracted rate, we can exit with 90 days notice regardless of auto-renewal. Cost us 0.2 cents/kWh extra but worth the peace of mind.
Albert from Huntsville with TVA territory. That's a smart approach Cecilia. We started requiring all broker contracts to include annual rate benchmarking against utility default rates. If the broker's rate is more than 10% above utility standard offer, we get an automatic out. Brokers hate it but legitimate ones will agree.
Love these ideas everyone. We ended up walking away from that Xcel deal entirely. Found a local broker who works on 1-year terms with simple 60-day notice requirements. Sometimes the best contract is the one you don't sign. Saved us probably $50K over what that auto-renewal would have cost.
Dave from Eugene, Oregon here. PacifiCorp territory doesn't have retail choice, but I consult with clients in deregulated states. Christine's experience is exactly why I tell everyone - the moment you see an auto-renewal clause longer than the original term, run. No exceptions. Legitimate brokers don't need to trap customers with fine print.