Early termination fees are charged by propane companies when a propane supply agreement is interrupted before the agreed date.
This can be because a customer is moving house, because a propane user is changing propane companies or because a homeowner has decided to stop using propane as a source of energy.
It is very rare to have to pay early termination fees if you own your propane tank. However, if you rent your propane tank from a propane company, early termination fees are usually around $100.
Include early termination conditions in quotes
Online reports indicate that customers are very surprised when they are charged early termination fees so it is recommended that as you request quotes from different propane companies you find out how much early termination fees are and in exactly what circumstances you might be asked to pay them. Ultimately, you want to know how much it will cost you to stop your propane supply and have your tank removed if you are renting it.
Indeed, propane supply agreements enter into a lot of details about the conditions under which propane supply may be terminated, in terms of fees and delays. The Ferrellgas master agreement, for example, does not mention any fees but imposes a 10-day notice before termination. These agreement models are adapted so ensure yours is as clear as possible.
Propane tank pump-out fee
Early termination fees are not the only expense associated to terminating a propane account. Tanks are not allowed to be moved if they are above 5% capacity. In this case, you will need the company to remove excess propane from your tank. Accordingly, your propane dealer will charge you a pump-out fee. They may offer to purchase excess propane from you and you should check what price per gallon each propane company offers in this regard.
Propane tank pick-up fee
Similarly, if your tank is rented from the company, you will be charged a tank pick-up fee, just as you may have been charged a tank installation fee when you got the tank. These vary according to the customer and local labor rates but tend to be between $25 and $100. Sometimes, the early termination fee is included in the tank pick up fee, which ends up being more expensive.
However, if you are switching suppliers, it is possible that your new company will purchase your tank from your old company, saving you the pick-up or pump-out fees. This is something you should check/negotiate with your new company.
Propane account closeout fee
Last, propane dealers charge close-out fees to cover administrative costs of closing an account. Again, these vary from company to company but are usually around a $30 flat fee.