What is An Energy Broker?

May 6, 2022 | Energy Efficiency for Business

Energy brokers are liaisons between retail energy suppliers and their customers in deregulated electricity and gas markets. In an energy deregulated market suppliers can purchase natural gas and electricity wholesale and resell it to business and homeowners or they can produce and sell it.

What Does an Energy Broker Do?

Commercial energy brokers help their clients navigate through the complex process of procuring energy supply for their natural gas and electricity. Energy brokers have contracts with multiple retail energy suppliers and offer quotes from all the suppliers they have agreements with. Here are 6 ways working with an energy broker can help your business:

1. Energy brokers have access to better pricing.

a. Brokers sell a lot of electricity and gas for the suppliers and they use that to negotiate better pricing in their contracts with suppliers. So the bigger the broker, the better the pricing (generally speaking). A business might get quoted 10 cents per kWh from a supplier and a broker might get 8 or 9 cents from that exact supplier for that same customer.

b. Brokers force suppliers to compete for your business and competition always lowers prices. A good broker will get pricing from many different suppliers (25+ in our case) and pass on the best to your business.

2. Energy brokers do the due diligence for you.

There are over 100 companies that supply energy in Texas alone and there are hundreds more nationally. Finding which one is right for your business can be a complex task. Do you choose one of the larger suppliers that dominate the market or do you find a mid sized supplier that is a great fit for your specific needs?

The energy market is hypercompetitive and some suppliers don’t have the financial wherewithal to compete in the industry, these suppliers will offer very low fixed-rates and add hidden charges in the contract or offer very low introductory rates only to jack the price up after 2-3 months, etc. An energy professional will make sure you are getting pricing from reputable suppliers.

Retail energy contracts can get complex, they vary from supplier to supplier, and change depending on what type of rate you are getting. Understanding things like pass-through charges, capacity charges, transmission charges, bandwidth clauses, etc. can be the difference between a good deal and a bad one.

3. Energy brokers have extensive market knowledge and expertise you might not have in-house.

After you’ve gotten a good rate you now need to decide how long of a contract you want. If you expect the market to go up a longer contract makes sense, and if the market is set to lower a shorter contract is the correct choice. A broker is going to be monitoring the following factors to stay on top of this:

Variations in electricity demand, availability of generation sources, fuel costs, power plant availability, and state and/or federal policy changes to the energy sector.

Think about professional services your company currently outsources. Depending on how large your business is you may have outside legal, accountants, IT, Marketing, PR, etc. Why treat energy procurement differently? Does the person responsible for your energy have the time or experience to review the different rates available, read and understand each energy contract, follow policy changes and world events that affect electricity and natural gas pricing and perform the necessary due diligence on the hundreds of suppliers selling energy?

4. Energy brokers provide customer service

A good energy broker provides customer service to their commercial customers. While supplier/utility issues and errors aren’t common, they do happen and your broker can help you through the problem. Whether it’s a billing error or question, energy brokers can help fix this quickly due to their relationships with energy suppliers.

Instead of waiting on hold and trying to get to the right department, have your energy broker’s customer service representative call for you, in most cases they will have a direct number and can speed the process up.

5. Energy brokers will save you a lot of time and effort.

A good energy broker is going to get pricing from 25+ REPs and will get them to compete for your business.

Energy brokers have to stay up to date with the global energy market, individual state policy changes, national policy changes and many other factors that affect natural gas and electricity prices.

Is it a good use of your time to spend the many hours it would take to get quotes every time you need to renew your contract, the many hours every month to stay on top of the energy market, and the hours to learn what type of rate your business needs?

6. Brokers will monitor the energy market looking for beneficial times to renew.

The energy market is ever changing and quite volatile, especially today in 2022. Keeping track of the market and recognizing beneficial times to enter a new contract is a lot of work. An energy broker will do that work for you so you can focus on what matters, your business.

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About Consumer Energy Solutions

CES was founded in 1999 and over the past 22+ years has serviced everything from small mom and pop shops to fortune 500 companies. We represent the largest and most reputable energy suppliers in North America and have an impeccable track record at securing the lowest rates possible.