Hiring an energy broker is an important decision. Energy brokers are an intermediary between your organization and power suppliers. They interpret your energy needs, make sense of available sources and costs and identify a strategy for your organization’s requirements. Before you make such an important commitment, here are three things you should consider. 

1. What benefits are you expecting to get from an energy broker?

 

 Before you hire a broker, you want to be clear about what benefits you are expecting. The top benefits most people seek when hiring a broker are 1) cost savings, 2) decision support for energy purchases 3) knowledge of a wide range of energy options to choose from. Once you get into the process of speaking to energy brokers, you want to be clear about the benefits you are expecting to ensure that they meet your needs. 

2. How much are you paying for your energy broker? 

 Energy brokers can be an effective way to help you do the heavy lifting of energy procurement. After all, you only have so many hours in your day. You can’t possibly learn about all the energy suppliers on your own and know how they compare. So of course energy brokers are entitled to a fee for service.  

The problem is that energy brokers typically get paid by putting their charges on the supplier bill, not by being paid directly by the client. Also, suppliers do not disclose fees to the client so it makes it very hard to figure out how much you are A) paying your broker and B) paying for your energy. Neither of these is usually transparent. And if you can’t tell how much you are paying, how can you tell what you are saving? It’s impossible. 

 

Also, since energy brokers act as a middle man, you can be subject to their “supplier bias” without even knowing about it. They might favor one supplier over another because of the percentage they get from them, not necessarily because they are the best value. In addition, you want to know how much their fee is on top of the energy costs that you are paying. 

 

 It’s critically important that you sign an explicit agreement with the broker that entitles you to break out fees paid to the broker and fees paid to the energy supplier. 

3. What are some alternatives to hiring an energy broker?

As with any procurement, you’ll want to compare options before you hire an energy broker. An energy broker is just one option. Another option is an energy management solution that provides the same benefits as a broker in terms of ease of decision making and negotiating costs, but where there is total transparency in pricing, fees and services.  

By using an energy management solution that gives you total transparency, you eliminate “supplier bias” and broker fees while gaining valuable additional benefits such as forecasting, benchmarking and automatic prompts to take advantage of market and purchasing opportunities. This saves you both time and money. 

“I am now back in control of my power costs with The Megawatt Hour. Not only has The Megawatt Hour helped us save money, but the platform has helped me make great decisions about my energy purchases.”

— Mark Gordon, Director of Facilities, Collegiate School

 

We were hit from all sides by every company for months soliciting an electricity contract. When it came down to deciding who would be the best fit all others were beginning to tire me out until we met The Megawatt Hour. They not only presented the best price for our power supply contract but their professionalism and patience throughout the negotiations process secured the deal. The supply price they got for us was the lowest including the cost of The Megawatt Hour subscription. It was how they handled themselves from our initial meeting to closing that made me decide they were a class act.”

—J. Edward Cecala, General Manager, Holiday Inn, Midtown

 

“The transparency and trust I get from The Megawatt Hour reinforces my decision making process. With The MWh, I receive reports that demonstrate the positive impact I’ve made.”

—Facilities Director, Large Non-Profit

 

“The information and analytics we get from MWh are not available anywhere else.”

—Energy Manager, Hospital System