Energy brokers assist clients in procuring electric or natural gas from energy. Since electricity and natural gas are commodities, prices change daily with the market. It is challenging for most businesses without energy managers to obtain price comparisons from a variety of suppliers since prices must be compared on exactly the same day. In addition, the terms of the particular contract offered by the supplier influences the price that is quoted. An energy broker can provide a valuable service if they work with a large number of suppliers and can actually compile the sundry prices from suppliers. An important aspect of this consulting role is to assure that the client understands the differences between the contract offers. Under some State Laws they use the term “Suppliers” to refer to energy suppliers, brokers, and aggregators, however there are very important differences between them all.
Energy brokers do not own or distribute energy, nor are allowed to sell energy directly to you. They simply present the rates of a wholesaler, or supplier.
See the complete definition at Wikipedia
All energy brokers aren’t the same so be careful to evaluate any company that you may consider. Some basic things to consider are:
- How long are they in business?
- Do they charge anything above and beyond what an energy producer will pay them?
- Are they nationwide in scope (at least for the deregulated states)?
- Do they have a relationship with all the major energy providers in your geography?
- Do they keep past clients beyond the initial contract period?
Many states have very strict requirements and legalities on who can “claim” to be an energy broker. In New Jersey where I am located, they took it even further where unless I have a commercial address and put up a $6000 bond, I can no longer be considered a consultant, let alone a broker; even though I’ve been doing exactly that for the past 12 years! Avion Energy has always been my broker and I am now called an independent agent instead of a consultant. Again, it depends on the state regulations as they all differ, including what people like me can even have as a title. So, in your state I may be considered an Energy Consultant but in either case, I’m an Independent Agent for Avion Energy.
I’m proud to represent Avion Energy throughout the country as an Energy Consultant even though in New Jersey I can only call myself an Independent Agent. After 12 years doing this, the only client I lost was because they went out of business due to COVID.