There are more than 2,200 energy “Brokers” in the Mid-Atlantic Region, with varying levels of expertise and experience, so how do you identify the good ones? We offer 8 questions to help you decide.
- Are they licensed – by the Public Utility Commission to operate in your utility area? If not, they are either operating illegally or working through a third party with a license, which simply adds another layer of expense.
- What is their bidding process? The evidence is clear: the shortest path to the lowest price is a reverse auction, where Suppliers compete head-to-head for your business. If they are not conducting reverse auctions, eliminate them immediately. Furthermore, if they are not conducting the auctions themselves, they are working through a third party, which simply adds another layer of expense. Dismiss them.
- How do they develop the Request For Pricing (RFP)? Expect your Broker to understand your energy strategy and goals fully, and to craft an RFP that explains ALL your requirements to the Suppliers clearly – e.g., multiple term lengths, bandwidth, green-power; and pass-through of Capacity and Transmission charges, and the terms for buying/selling overage/underage.
- How many suppliers do they work with? A capable broker should have a network of at least 30-50 suppliers. New Suppliers entering the market often bid aggressively to capture market share, so your broker should keep abreast of new entrants. Expect bids from 12-20 Suppliers for electricity and 6-10 for natural gas.
- Is this a good time to buy? Of all the factors that affect energy pricing, none is more important than timing. For example, current electricity prices are holding at 5-year lows, and the “Futures” pricing curves are highly favorable. If your broker has not alerted you to this, you are missing a historic buying opportunity. Does the Broker have the knowledge and experience to understand the complex factors that drive the market? Do they use this understanding to minimize your risk and maximize your opportunities? Click Here to See Current Market Graph and Drivers.
- What is their contracting process?. This step – often overlooked – can be critical. Every Supplier has a different contract, and regulatory issues can create unpleasant surprises. An experienced Broker can help you avoid contracting pitfalls and regulatory landmines.
- Do they value your time? Once the bids are in, you should be presented with EVERY bid on EVERY contract variable, followed by a concise summary of your best options. You should spend no more than 2-3 hours on this entire process, including the initial strategy consultation.
- What ongoing support do they provide? To ensure that you are being billed correctly from both the Supplier and utility, bill audits must be conducted throughout the term of the contract, with your Broker taking charge when there is an issue.
Lastly, have you asked your broker to provide 3rd party references and testimonials as evidence of his experience, competence and efficient process? You need to have…
- Confidence that you have seen EVERY price available
- Confidence that you have chosen the appropriate approach for your energy strategy
- Confidence that your contracts are free of pitfalls and unpleasant surprises.
How Does Applied Energy Partners Compare? We recently surveyed 42 of the most prominent energy Suppliers in the Northeast and mid-Atlantic states, seeking their feedback on our reverse auction process, accuracy, and efficiency. On average, they deal with 58 different Brokers and some deal with as many as 200. The results were:
84% ranked AEP and The Energy Exchange among the top 10% of all their brokers
and 17% ranked us #1.