A1 Energy

6 Advantages of Engaging an Energy Broker

11.25.20 12:40 PM By Jon
energy procurement team analyzing energy markets

Anyone who has ever purchased energy for their facility knows that energy procurement is not a one-size-fits-all solution. There are so many factors that go into the investment, like knowing when to renew your energy contracts and whether or not you should employ an energy broker.

Energy brokers have their own set of perks. For commercial and industrial businesses, there are six key advantages to engaging an energy broker yourself.

First Off: What is an Energy Broker?

An energy broker—or energy consultant—helps you optimize your energy supply. They help you keep your costs low, comply with local and state regulations and reach your sustainability targets.

But that's just the start.

1. ​Save time with an energy consultant

All the factors that go into a successful energy contract have something in common.

They take time.

This includes watching the energy markets, comparing offers from suppliers, and bridging the gap in communication. 

The U.S. Bureau of Labor Statistics tells us that the average full-time worker above the age of 25 works 8.5 hours per day (plus 5.53 hours on weekends). That's far more than full-time hours. For some, adding energy purchasing to the mix is a burden. For others, it's simply out of the question.

Energy consultants do the leg work for you. All the while, you can continue the good work you do in the commercial and industrial sectors without the burden of taking on too much. Plus, your team can focus on what they do best.

​2. Save money, too

In the world of energy, demand affects prices.

In 2019, energy usage for buildings reached an all-time peak, thanks in part to more extreme weather events (the year was the second hottest on record) and growing energy demand.

Since then, demand may have shifted—but it's tricky to secure contracts before bullish price hikes. Energy consultants know how to work the system to keep energy costs low for industrial and commercial clients, who often secure energy for long periods at a time.

Due to industry knowledge and connections, brokers can secure competitive supply pricing through a strategic process. Without the knowledge and connections it is difficult to achieve the best results.

It's not just the prices that make a difference, either. There's also usage.

An energy broker knows how to estimate future load usage, so you're not signing on for more (or less) energy than you really need.

​3. A commercial energy broker helps you easily compare offers

When procuring energy for your facility, one of the key steps is comparing offers from suppliers. These comparisons can get pretty complex. Having an energy broker break things down can help you easily digest the information. For example: Is the supplier response for "energy only" pricing? Is capacity and transmission treated as a straight pass through? Is gross receipts tax included?

Get an easy-to-understand comparison of offers from various suppliers, so you know what you're getting yourself into. This way, a consultant can help you reach your fiscal and usage goals. 

Plus, if you're looking to prioritize sustainability without sacrificing price, you can compare different energy products that include renewable and stored energy.

Overall, you get more flexibility in your energy suppliers.

energy procurement strategies

Energy Contract Assessment

What type of energy procurement contract is best for my facility? 

​4. Get a comprehensive review of terms and conditions

Getting into a new energy contract means signing on to terms and conditions. T&Cs are teeming with fine print. More often than not, people miss out on important details or forget to read between the lines.

A professional has the capability to review your T&Cs to ensure they're in your best interest. No jargon can get past a good energy broker, either.

If only you could have that peace of mind for all the T&Cs you agree to in life...

​5. An energy broker watches over your contract

Renewing your energy supply contract requires a lot, not the least of which is watching the market consistently and calculating future load usage.

The start of a new contract isn't the only time you should be managing it, either.

Oftentimes, companies fail to notice errors in their utility bills. And why would they? The bills tend to be complex, and the routine nature of payments can cause employees to overlook issues.

An energy consultant audits every bill and tackles errors on the spot before you overpay.

And one more thing: In Pennsylvania, demand response programs give organizations a chance to earn and save when they keep usage low during peak demand. A broker is the best person to hook you up with programs like this.

With an energy broker at hand, someone is auditing every bill and making sure your contract terms are in place. They're keeping an eye on your contract throughout the year, optimizing it whenever possible. As your business changes, your agreements might follow.

energy broker discussing energy procurement contracts

​6. Energy consultants always keep their eyes on the market

Energy prices fluctuate. In fact, costs change by the minute. Prices tend to be highest in the afternoon and early evening because of increased demand. This is just an average—the market really requires consistent attention.

There are a lot of reasons for these rapid fluctuations, including:

  • Fuel prices
  • Power plant costs
  • Distribution systems
  • Weather
  • Changing policy and regulations

In addition, prices change by type of customer and locality. During COVID-19, electricity usage dipped by at least 20% in places with lockdown measures—yet another factor of market shifts.

An energy broker has the capacity to continuously keep their eyes on the market for the next buying opportunity. Whatever the factor at hand, they'll catch the fluctuations—and help keep your costs balanced. That's not something most facility leaders can fit into their schedule.

Energy broker or not, know what you're getting into

For energy procurement to work in your best interest, the process must be comprehensive. Whether it's you or an energy broker taking on the task, you should know the basics. 

Check out our guide to energy procurement services so you can make educated decisions about all your energy needs. Contact us with any questions you may have.

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