All businesses have unique energy needs and want to save as much money as possible in this cost category. But procuring the best possible pricing from energy suppliers is no small feat. It takes a great deal of time, resources, and expertise to understand the energy market and how to strategically secure optimal energy contracts for your business. The simple truth is that many businesses don’t have the knowledge or manpower needed to manage their energy costs effectively.
Luckily, energy brokers exist to help businesses understand their energy needs and to find the best deal possible on their energy costs.
In this article, we’ll explore what an energy broker is, why businesses should consider working with an energy broker, and how energy brokers find savings for clients.
What Is an Energy Broker?
As a middle man between energy suppliers and customers, an energy broker helps businesses secure fair pricing for their energy needs by comparing rates and contracts across suppliers and negotiating contract terms on behalf of their clients.
In some cases a broker will also serve clients as a consultant, offering services such as ongoing energy invoice auditing in order to help find overcharges, errors, or breaches of contract. They can also help businesses define an energy management strategy to ensure that the business secures energy contracts that will support long-term growth.
Energy brokers are most prominent in states with deregulated energy markets where pricing comparison and negotiations make a significant difference to how much customers pay for energy. Brokers do work in regulated energy markets but focus more on consultant-type service offerings in these regulated states.
Why Should You Work With an Energy Broker?
Though it’s possible for your business to compare energy pricing and lock in a contract that seems fair, unless you have someone in-house with in-depth knowledge and years of experience securing deals in the energy market, you’re likely leaving money on the table. Energy pricing is always changing and the average business doesn’t have access to the real-time data or resources needed to enter a contract at the ideal time. Additionally, most businesses simply don’t have the time needed to properly compare pricing across multiple suppliers.
Understanding the differences between energy suppliers and their varying contracts is also a very complex task. Contracts are difficult to read and often won’t make sense to someone outside of the energy industry. And just comparing pricing between suppliers isn’t enough to secure you a deal that will fit your unique energy needs. Between having to understand the terms and conditions and understanding the energy contract clauses to find the right supplier, it serves a customer best to work with an energy broker.
Furthermore, energy brokers understand the complicated world of energy tariffs and how they impact your energy costs. Tariff documents are very long and difficult to understand, which leads many companies to unknowingly function under the wrong tariffs. Thus, they spend more than they have to on their energy. In almost all cases, it takes the help of an energy broker to know how to operate within the correct tariffs.
How Energy Brokers Find Savings for Clients
1. Procure the Best Energy Pricing
Energy brokers have access to world-class market intelligence data and monitoring software which allows them to accurately compare pricing across multiple energy suppliers. Since energy prices are continuously rising and falling, they can see in real-time which suppliers have the best offerings that will suit your business. Being able to lock in a contract on the dips in pricing can make a huge difference for your overall energy spend.
Since energy suppliers also know that brokers are comparing pricing on behalf of their clients, it forces the suppliers to compete for your business which ultimately drives costs down. If the average customer reaches out to suppliers on their own, this element of competition is not there because the suppliers know that customers don’t have the resources needed to effectively negotiate the best pricing.
Additionally, since energy brokers are likely working with multiple clients at a time, suppliers have incentives to give them the best pricing to potentially gain multiple sources of business. When the average customer reaches out, the supplier is only gaining one source of business, meaning they don’t have the same drive to lower their pricing.
2. Provide an Energy Management Strategy
Part of securing the best energy contract for your business involves not only understanding your current energy needs but also looking ahead to your future energy requirements. An energy broker considers the nuances of your business and potential growth when securing the best deal for your business. This ensures that your costs remain low for the long term and not just the present moment. Sometimes, the cheapest option isn’t the best for long-term growth, and your broker will know how to weigh the pros and cons of each supplier in regards to your needs.
3. Monitor Supplier Contracts and Tariffs
Every contract outlines how much you will be charged for the energy you use, and an energy broker can make sure that you’re in fact being billed according to the contract. Suppliers sometimes make mistakes in the form of overcharges and billing errors which need to be corrected in a timely manner. Brokers are experts at spotting these discrepancies and have the skills needed to get their clients the money back that they are due. Without their help, a business could go months or years without knowing that they’re not being billed in accordance with their contract.
Brokers also stay up-to-date on new billing structures and regulatory changes to ensure that their clients are doing what they have to in order to stay in line with their contracts. Many businesses don’t think about these details until they’re hit with extra fees that could have been avoided from the start.
Furthermore, brokers stay on top of any changes to energy tariffs and make sure that their clients are functioning under the correct ones. They can also help businesses utilize energy in a way that could help them qualify for certain incentives in accordance with the tariffs.
Save Money by Hiring an Energy Broker
An energy broker can play a vital role in helping you secure the best possible pricing for your unique energy needs. With their expertise, brokers will compare offerings from multiple suppliers; negotiate contract terms on your behalf; lock in those contracts at the optimal time; and also continuously monitor your invoices and contracts to make sure you are being billed correctly. Additionally, an energy broker will find you a supplier that will serve your energy needs now and into the future based on your business’s growth potential.
Not only do energy brokers save you money, but they save you the time and effort of having to do these tasks yourself. Even if you do have someone on staff that typically handles energy procurement and management, they’re likely not an industry expert with multiple years of experience securing optimal energy contracts.
If you’re ready to start experiencing the benefits of working with an energy broker, our team of energy brokers and utility auditing experts at P3 Cost Analysts are here to help. Whether you operate in a deregulated or regulated energy market, we have the skills needed to find you savings. Furthermore, our clients don’t pay anything until we have secured the savings they deserve.
To learn more, schedule a free utility audit today!