Why use Electricity Brokers?

Electricity is one of the biggest expenses for a company, usually right under their payroll.  So when a company is in a deregulated market it can be very beneficial for that company to find a lower rate on their electricity.  When companies in deregulated areas are looking for the best rate on their electricity there are a few different ways to go about it.  They can either take one of their employees and have them work with each provider and try and receive the best rate, or they can use an electricity broker who will act on their behalf and retrieve bids for them.

Some companies might want to keep this decision in house and just appoint one of their current employees to perform this task.  Doing this is not always the most efficient way of accomplishing the goal of securing the lowest market rate possible.  First, you are taking whomever you appoint to this job away from their normal activities which a lot of time companies can not afford to do.  Another disadvantage that this may bring to your company, there can be a lot of hidden charges and clauses that someone who does not deal with these contracts on a regular basis could over look when signing a new contract.

That is why there are a number of companies using electricity brokers when it comes to these decisions.  An electricity broker can benefit your company by taking all of the leg work out of this decision for you.  They procure your electricity usage history, and analyze the data.  Then can send this information to a number of providers and receive multiple competitive bids for you on your behalf.

On top of this a broker can ensure you receive all the necessary contract concessions that you would not normally get.  Like making sure there is a ‘Blend and Extend Clause’ in there.  The most important added value service an electricity broker can provide for his client is the implementation and use of a ‘Blend and Extend Clause’ in the electricity contract with the Retail Electric Provider. The ‘Blend and Extend Clause’ allows a customer to renegotiate and lower there fixed rate if the market takes a drop after the execution of the original contract. With the natural gas and electricity markets being as volatile as they have been, this added service is a necessity if a company wants to minimize their energy expenditure.

Something else that a broker will do for his client is check for any bandwidth limitation clauses, this will charge the customer additional fees if they go above or below a certain percent usage for a given term.  You will want to make sure that you are not limited in case of expansion or down sizing.

Also, a broker will audit his clients usage twice a year from the regulated utility twice a year.  This will give you a peace of mind that the electric provider is billing you for the correct amount of electricity.

The best thing about using a broker is that this can all be done without any additional charge to you or your company.  They act as a buyer’s agent, looking out for their client’s best interest, and are compensated a prearranged fee by the provider who comes in with the best offer.