It’s great to have choices… if you know how to make them
Energy deregulation is great in that it allows you to choose your electricity provider-and by doing so, find the lowest energy rate available. The problem is that, while you can choose your energy provider, it’s not as easy as you’d think to compare them.
- Do you call or email every energy provider to ask for rates? (Hint: there are a few hundred in Texas alone)
- Do you use a price comparison website? If so, which one? Are they all unbiased?
- Even if you find the cheapest energy rate, are you sure it doesn’t come with extra fees and line-items that will cost you more in the long run?
- Does the cheaper energy rate come at the expense of customer service? Are you going to investigate reviews for every energy company in addition to rates?
- Do you know where the energy market is right now–if prices are higher or lower than normal?
This is where energy brokers can be a great tool for you.
How an energy broker solves this for you
Brokers act as middle-men between you, the energy consumer, and the electric providers. While it’s common to talk about saving money by “cutting out the middle-man,” with brokers, the opposite is true. An energy brokerage essentially forces the different electricity providers to compete against each other for your business. Who is willing to offer the lowest energy rate? Who is willing to beat that offer? We make them prove that they want your business.
Couldn’t you just do this yourself? Yes. But there are a few reasons why using an energy broker is even better. One of the best reasons is that energy brokers can actually negotiate you lower electricity rates than you could get yourself! The rate offered by an energy provider is related, in part, to the amount of business the brokers bring them. Just like how you can save on your groceries if you buy in bulk, brokers can negotiate discounts for clients based on the amount of business the energy suppliers receive from us.
Another benefit is that, when an energy broker does the work for you, you will be saved a lot of hassle . How long do you think it will take to call around to every energy provider in your area? If you could narrow it down to a few, it would go faster, but how do you do that? Do you know which energy providers offer the best (or worst) customer service? Do you know which has electricity plans that will fit the specific services you need? Not all energy plans were created equal, so focusing strictly on the energy rate can be costly!
This is another benefit: the knowledge of the energy market that an energy brokerage can provide. Good brokers know the local energy market, and what is going on with electricity rates on any given day. They know which providers are good and which are not as reputable. Good brokers know which energy providers offer which services in their contract–and can help you figure out which are important for you, depending on things like your energy usage patterns and where you live.
Why comparison sites don’t always help you select the right plan
A lot of people rely on comparison sites to find the best energy rate available. But are these any better?
How do you determine which site to use? Just like the energy suppliers, not all comparison sites were created equal! You could always compare the comparison sites, going to each one to see which had the best energy rates, but this wouldn’t save you any more time than if you just went to the energy providers, themselves.
Plus, the problem still remains that the cheapest energy rate isn’t always best. Some electricity plans include various fees as part of their energy rate, while other plans add these fees as separate line-items. If you go with the cheapest rate, you may be surprised by all the “extras” that show up on your energy bill, and in the long run, this might cost you more! Comparison sites make it easy to compare the energy charge, but these extra details are in the fine print of the contract. If you have to read a different energy contract for each of the plans you see, you’re definitely not going to save time. (Plus, even we get bored reading long contracts, and we do this for a living!)
Then, there’s always the market. Will rates be lower tomorrow? next week? next month? No one knows for sure, but someone with knowledge of the market and the energy business can keep you from going in blind.
Finally, what do you know about the different energy providers listed on a site? If a site only lists a two or three providers, is that really a good sampling? The whole process works by forcing the energy providers to compete against each other. A comparison site just doesn’t have much leverage if they aren’t getting rates from several providers.
On the other hand, some energy sites boast that they show plans from every provider, but is this really the answer? If this is the case, the site is doing nothing to help you sift through the energy providers that might not be as reputable or that might not provide much in the way of customer service.
How energy brokers get paid
It’s all well and good if brokers can reduce your energy bill, but how much will you pay to hire them? It’s easy to think this could just make things more complicated if you have to calculate savings against that added expense.
Brokers are paid by the energy providers. When you pay your electric bill, the provider uses part of that to pay for the electricity you use, part of it to pay their own employees and business expenses, and part of it to pay the brokers.
Some brokers, however, will still charge you extra fees on this. This could be a single fee for the service or a monthly account fee. Either way, they’re essentially double-dipping. The provider already pays them, so there’s not an honest need to charge you directly.
Assuming the brokerage isn’t charging you extra, this is one of the best reasons for using an energy broker. If your energy rate is lower than you could get for a comparable plan–and if that still covers the energy broker’s services–you’ve really won!
What you should look for from a broker who wants your business
In this business, we have heard lots of people say that the concept of energy brokers sounds like a gimmick. Even if it does sound like a good idea to you, it can be hard to figure out which brokers are trustworthy and which are not. Do they really have their clients’ best interests in mind? If you get a great energy rate, is it going to come with unexpected fees and line-items? If you talk with an energy broker, here are some questions you can ask:
- “Do I pay you anything directly?” Remember that energy brokers are already paid by the provider. Clients shouldn’t have to fork over any more money.
- “How many energy providers do you work with?” If it’s only a handful, they’re probably not getting you the best options. If it’s several dozen or more, they’re probably not to discerning about their partners.
- “What fees are covered by this rate, and what will be extra on my bill?”
- “What other fees could potentially show up on my bill?” Some energy suppliers have different fees for early termination, not hitting a minimum usage, exceeding a maximum usage, paying with a credit card, etc.
- “Who do I contact with customer service issues?” If the provider’s customer service falls short, will the broker pick up the slack? Better yet, will the brokerage handle all the customer service in the first place, making things even easier on you?
And the cherry on top:
- “Will you give me all this in writing?”
Finding a career with us as an energy broker
TruEnergy is always looking for hard working, outgoing brokers to join our team. Click here for more information on what it takes to be an energy broker and to apply today!