Common Mistakes Businesses Make When Switching Energy Suppliers (And How to Avoid Them)

Switching energy suppliers in a deregulated market can feel like a golden opportunity to cut costs and improve your bottom line. But behind every tempting offer lies some terms, deadlines, and conditions that can trip up even the savviest business owners. Avoiding common pitfalls upfront is essential for making sure you don’t trade one headache for another. Below, we run through a list of these potential pitfalls, starting with the biggest and most costly mistake owners make when signing that contract.

Signing Before Reading the Fine Print

It’s tempting to choose the lowest rate or bite on an offer that sounds too good to pass up. But energy contracts aren’t always written in plain English: buried in the fine print could be clauses about rate changes, auto-renewals, or even penalties for an early exit. The first mistake? Signing before fully understanding every term.

• Here’s how to avoid it: Read the contract. Twice. Ask your supplier to clearly explain any section you don’t understand, especially variable vs. fixed rates, contract length, and what happens at renewal. If it still feels confusing, keep asking until it’s crystal clear.
• Please note: If you’re planning to move, expand, or switch locations, make sure your contract lines up with those plans. Some agreements include hefty penalties for breaking the contract early or transferring service to a new address.

Overlooking Notice Periods and Timing

Many businesses overlook those pesky notice periods before ending or switching a contract—or just assume they can switch whenever they want. Missing the window for notifying your current supplier can incur unexpected fees.

• Here’s how to avoid it: Put key dates in your calendar as soon as you sign. Set reminders months before your contract ends. If you’re planning to switch to a new supplier, check exactly how much notice you need to give (it can be 30, 60, or even 90 days), and confirm the process for submitting it in writing.

Ignoring Hidden Fees

A low-quoted rate can quickly balloon when you tack on service fees—like fixed monthly customer charges or fees for grid upkeep—or capacity charges, which are set in advance based on your peak demand and published in rate schedules. Suddenly, that “bargain” deal costs more than you planned, and there’s little recourse once the ink is dry.

• Here’s how to avoid it: Request a complete, itemized breakdown of all costs, not just the headline rates. Double-check if there are fees for things like early termination, administrative tasks, or volume tolerance or swings (extra costs if your usage is much higher or lower than expected).

Forgetting to Review Usage Data

Energy contracts are only as good as the data they’re based on. If you (or your supplier) are using incomplete or incorrect usage history data, your quote might be way off the mark—leading to under- or over-estimated savings.

• Here’s how to avoid it: Make sure your supplier has access to your actual usage data—usually via a Letter of Authorization (LOA). Confirm that the quote reflects your business’s real energy use patterns, seasonality, and any anticipated changes.

Assuming All Suppliers Are Created Equal

Not all energy suppliers operate with the same transparency, billing practices, or responsiveness. Picking the wrong partner can lead to headaches, poor service, or unexpected costs down the line.

• Here’s how to avoid it: Do your homework. Seek out supplier reviews, check their reputation for service and support, and don’t be afraid to ask tough questions about their dispute resolution and customer care processes.

The Bottom Line

Changing suppliers can be great for your bottom line, but only if you’re aware of the common pitfalls. A little diligence (and a lot of questions) goes a long way toward ensuring your new energy contract delivers the value, clarity, and predictability you’re looking for. Don’t let hidden traps turn an opportunity into an expensive lesson. At Catalyst Power^®, we make switching energy providers as seamless as possible and offer a dedicated account manager to you. We put the power back into your hands, literally. Download our one-pager below to learn more about our offerings.