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What is an Energy Broker?

5 minutes
10/27/2023
Employee analyzing global fund market investment statistics on computer

Energy markets span a broad timeline, including everything from the time power is generated at its source to the time it reaches the consumer. Several key players have a hand in this process, including suppliers and utility companies who generate, transmit, and distribute electricity. One often overlooked, but important part of the energy supply chain are brokers. These energy experts serve as middlemen between energy suppliers and consumers.

Defining an Energy Broker

In general, energy brokers are industry experts who have their finger on the pulse of energy markets. An energy broker serves as a liaison between an energy end user and the vast selection of energy suppliers available to them. The end user might be a residential, commercial, or industrial customer. Brokers serve their clients by securing energy at a better rate and under more favorable terms. To this end, they constantly compare the rates and plans offered by energy suppliers.

Energy brokers are most common in states with deregulated energy markets. In these states, their services can make a real difference in how much customers pay for energy.

Brokers are still important in regulated markets, although they tend to serve more as consultants. There, they often focus on energy conservation and strategic energy planning. They may also offer energy invoice auditing that identifies overcharges, errors, or breaches of contract.

Licensing

Requirements for energy brokers vary from state to state. Many deregulated states require energy brokers to be licensed in order to negotiate energy contracts. Some states also have financial stability requirements to ensure extra security for their energy clients.

Commercial vs. Residential Energy Brokers

Energy markets differ greatly for residential and commercial customers. In addition to a deep understanding of energy markets, energy brokers also need to be well-versed in the nuances of both residential and commercial energy contracts.

Residential energy brokers

The best residential energy brokers align energy plans with the unique needs of their clients. Their websites deliver an intuitive browsing experience. They work to educate customers every step of the way.

In deregulated states, residential energy brokers navigate a bewildering array of options. For example, the Public Utility Commission of Texas lists more than 100 residential energy providers (REPs). Each of these REPs offer pricing that changes daily and unique offerings in terms of renewable options, sign up perks, contract lengths, and peak demand hours. Astute brokers also monitor suppliers that may enter or leave given energy markets.

Commercial energy brokers

Commercial energy brokers perform similar services in terms of pricing insights and contract navigation for their clients. In addition, commercial energy brokers often:

  • Review the historical energy usage of clients
  • Research trends in energy management
  • Align a company’s operating schedule with the right energy plan
  • Pursue renewable energy plans that advance corporate mission statements

Commercial brokers can also help to quantify energy usage a company can reduce during times of peak loads. In some situations, it is even possible to automate energy reductions.

They also help clients navigate confusing tariff documents. Some businesses unwittingly operate under the wrong one, overpaying in the process. Commercial brokers may also advise clients on the installation of energy usage sensors on energy-intensive equipment. For example, they might recommend staggering the use of motors and other energy-intensive equipment to save money.

Key Responsibilities of Energy Brokers

The energy marketplace is dynamic and always changing. To serve clients, brokers must have a comprehensive understanding of all energy sources. They must be aware of which suppliers are embracing newer, more efficient technologies and be up to date on the incentives offered by each supplier.

Develop relationships with energy providers

Brokers establish quality working relationships with reputable retail energy providers. They may be in a position to negotiate better rates based on how much business they can send to select REPs.

Negotiate the best deals

A key role for an energy broker is to negotiate the best deal for a customer. This includes:

  • Finding the best rate offered by competing energy suppliers
  • Identifying and working with reputable energy suppliers
  • Selecting an ideal plan: fixed rate, variable rate, or other
  • Identifying the best contract term for each client

Promote energy conservation

Corporate mission statements often include a commitment to sustainability. Energy conservation saves money and reduces emissions. Brokers that offer consulting services can help identify sources of waste, like:

Comprehensive weatherization and conversion to energy-efficient LED lighting may significantly reduce energy usage. For businesses in particular, on-site solar generates electricity that reduces the energy drawn from the grid. “Going green” may even increase property values.

The Rise of Online Utility Brokers

Early in the era of deregulation, energy brokers did a lot by hand. They sent out manual price requests, negotiated rates over the phone, and worked with paper contracts.

Today, modern technology alters the way energy brokers do business. They now have the ability to:

  • Use their websites to instantly report energy prices from competing suppliers
  • Expedite custom quotes for customers
  • Review and complete contracts online
  • Accept electronic signatures

Electricity brokers can now connect directly with the energy suppliers’ backend software. This makes it possible to instantly update prices on broker websites. It also makes it possible to quickly enroll online via the broker’s website.

Today’s emphasis on going green gives rise to renewable energy brokers. They identify suppliers who specialize in offering electricity generated from solar, wind, and hydroelectric sources.

Who Can Benefit from an Energy Broker?

Energy brokers help both residential and commercial customers. But what about you? Should you consider enlisting the services of such a broker? Here are some pertinent questions to ask.

  • Am I in a deregulated state where energy brokers help compare energy suppliers?
  • What percentage of my household or business expenses are for energy?
  • Do I feel confident researching energy supplier options on my own?

Energy brokers are adept at finding opportunities for their clients to save money. For example, a broker may recommend enrollment in an energy demand response (DR) program. Enrollees get discounts in return for commitments to reduce consumption during times of peak loads. Energy brokers may bundle residential energy consumers to maximize DR benefits.

How Price to Compare Can Help

Price to Compare delivers an enhanced experience to residential energy customers. It is powered by Integrity Energy, one of America’s largest commercial energy brokers.

Price to Compare’s online comparison tool offers state-of-the-art comparison shopping. Not sure where to begin? Contact one of our expert energy consultants today.

Price to Compare helps you navigate today’s energy market with ease. Make the best energy choices in the following states:

A map of the United States showing the breakdown of states with no deregulation, deregulated gas only, deregulated electric and gas, and deregulated electricity only