Let’s say you sign an energy contract in November and decide to switch to another provider in June. That might seem like odd timing, but maybe you found a better deal elsewhere, or you're moving house. Then comes your final bill — and to your surprise, you’re asked to pay an additional €500. Why?
It all comes down to how energy companies structure their monthly payments.
When you become a customer, the energy provider estimates your annual usage and sets a fixed monthly payment based on that. This amount is averaged out over the year — but your actual usage isn’t. In the winter, you use more energy (for heating, lighting), while in the summer your usage is relatively low. So although you pay the same amount every month, you’re underpaying in winter and overpaying in summer. Normally, this balances out over the full year when you get your final annual settlement.
But if you cancel your contract halfway through that energy year — before summer — you’ve likely used more than you’ve paid for.
Example
Let’s say your monthly payment is €150, and your contract runs from November to November. In the first 7 months (November through May), you’ve paid:
7 months × €150 = €1,050
However, due to high winter usage, your actual consumption in those months might already amount to €1,550 worth of energy. The summer months (June to October) would normally even things out, but since you’re no longer a customer during that time, your final bill includes a €500 shortfall.
That €500 feels like a surprise, but it’s simply the unpaid part of the energy you already used.
It’s important to be aware that when ending a contract early, you might not only face a potential early termination fee, but also a usage-based correction (or “true-up”) on your final bill.
So when is a smart time to switch?
If you're considering switching energy providers, it’s wise to do so:
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At the end of your contract year — in this (fictional) example, around October or November — when everything has balanced out.
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Or after summer, for example in September, when you’ve already paid more than you've used and are less likely to owe anything.
That way, you can avoid unexpected final charges and make a smooth switch to your next provider. Alternatively, you can always request a projected final bill from your current supplier before you cancel — so you know what to expect and won’t be caught off guard financially.