How do I fight a cancellation fee that I didn't know about?

I am not sure I know exactly what to suggest without knowing details of the service contract. But just a general question: are / were you switching from a regulated utility to a distributor company?
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I received a letter from my recently discontinued electric supplier that according to their contract I have to pay a $1000 cancellation fee. First, I didn't receive a contract from them and secondly I was not informed of this fee when I signed on with them. They sent a letter with no response date to reply that I had to contact them to avoid disconnecting their service and the cancellation fee. Now that I am past the "date" I was suppose to respond to they are not willing to reinstate my service with them and waive the fee.
Any suggestions?
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