Most business owners understand the importance of changing electricity providers but they don’t have the resource, time and expertise to identify the best electricity deal. Additionally, the evolution in the energy market coupled with intricate regulations, makes it hard for businesses and companies in Texas to control their electricity expenses. However, if you are a business owner and you relate with the above difficulties, the good news is that there is a solution for all that, and it lies with energy brokers.
Energy brokers act as a link between the energy consumers and the energy providers and they usually have an in-depth understanding of the complicated pricing structure and have a detailed knowledge of the Texas energy market. A good energy broker can be able to study, analyze and monitor energy market pricing trends and can also predict fairly accurate future increase or drop in energy prices.
In some energy markets such as Texas, a small or medium sized business owner is more likely to be contacted by an energy broker compared to an energy provider. In Texas, for one to practice as an energy broker, he/she has to be registered with the Public Utility Commission.
There are so many energy brokers (both individual brokers and agencies) in Texas and identifying the right one can be a daunting task. You will probably need to do a background check in addition to asking a couple of questions to establish their credentials and work experience. The best energy broker is one who represents your interest. It is therefore important to choose an electricity broker whose values are in line with your business objectives.
Here are some of the questions that you may need to ask before choosing an electricity broker.
How many retail electric providers marketing agreement has the broker done?
The question will help you to assess the performance and aggressiveness of the broker. A good energy broker is one who has several agreements with the best performing energy providers in the market. This is also a sign that the broker can be trusted to deliver good results.
There are some brokers who work as a pseudo-exclusive ambassador for one or two energy providers. Having an electricity broker who can market your business to five or even six electricity retail companies, is the best thing as it’ll enable you to get the best electricity deal in the market.
How much is the broker paid for his services?
This is one of those trick questions that will enable you to assess whether the broker is truthful and honest. You see, some electricity brokers will tell you that they work for free. Don’t fall for this lie; nobody earns a living by working for free. The truth is that the broker is paid based on the kilowatt-hour (kWh) of sales. This cost is normally included in the electricity rate. This is a routine and fair practice provided the broker offers valued service and the cost is sensible. The aim of this question is basically to determine whether the broker is truthful about the payment structure. Never choose an electricity broker who is not frank about his/her payment structure.
How does the broker create Requests For Pricing or RFP?
You want a broker who clearly appreciates your energy goals and strategy and who can create an RFP that clearly highlights all your business to the energy providers. This includes things like; your preferred electricity plan bandwidth, green-power, multiple term length, as well as the pass through of transmission and capacity charges. Moreover, the broker should demonstrate that he/she understands your preferred terms of selling/buying underage/overage.
What is their contracting technique?
This is one of the most ignored questions but very crucial considering the fact that different energy providers have varied contracts. Additionally, there are some energy legislations that can cause unfriendly surprises. A top-rated broker will enable you to avoid these traps and regulatory time bombs.
Will the broker loop you in on the rates offered by the electric companies?
The right broker understands that his role is simply to present offers and give recommendations, but the overall decision as to which electric company to choose, rests with you. After all, the agreement is between the energy provider and you and not the broker. And thus, you need to be kept in the loop of all the offers on the table for you to compare them vis-à-vis the broker’s recommendations.
You should also be able to ask questions concerning the energy provider e.g. questions on financial stability, reward programs, online account management, complaint history, among others. Take more interest if the electricity broker recommends a company with the highest price. There could be a justifiable reason for this, nonetheless, you need to ask so that you can know whether the broker represents your interests or not.
Is this the ideal period to buy?
One of the most important factors when it comes to electricity pricing is timing. A reputable broker should be able to inform you when the electricity prices are at all time low and when the future pricing looks promising.
This question will assist you to assess the broker’s proficiency in analyzing factors that influence electricity prices. And how they can use their experience to help you make the most of your opportunities and minimize the risks.
Does the broker understand your business risk tolerance?
A detailed energy broker will look out for any potential changes to your business. Are you modifying operations, increasing floor space, or are you relocating, closing locations or adding new locations? Is your business risk-free? Do you prefer variable or fixed rate electricity plans? What is your preference in regards to long term or short term electricity plans? A good broker will ask you all these questions to establish what type of electric plan best suits your business.
Is the broker licensed?
As stated earlier, electricity brokers in Texas are regulated by the Public Utility Commission. Brokers who are not licensed are either operating under a third party’s license or they are working illegally.
Benefits of a broker
Less-time consuming; Managing energy suppliers, contracts and bills can be quite challenging. An energy broker can easily perform these tasks for you, and therefore, you shouldn’t worry about making mistakes.
Cheaper: Electricity cost forms one of the highest expenditures among businesses and the rates can fluctuate from low to high in a short span of time. By using a broker, you get an energy market specialist who can help you negotiate for cheaper prices.
Easier: A broker takes the burden of choosing the right rate, contract, and plans off your hand leaving you to focus on other areas of the business.