With energy deregulation in Texas, customers have the ability to choose their energy supplier, giving them more control over their energy costs and consumption. The deregulated energy market in Texas has led to increased competition among energy providers, which can be overwhelming for customers who may not have the time or experience to review their energy options.
This is where working with an energy broker can be particularly helpful. Energy brokers are experts in the energy industry, with market expertise and knowledge of the energy options available to customers. They can help commercial and residential customers find the best energy plan for their unique energy needs and consumption patterns.
In this article, we will discuss the top things to consider when choosing an energy broker in a deregulated energy market in Texas.
Understanding the Deregulated Energy Market
Before we delve into choosing an energy broker, it’s essential to understand what a deregulated energy market means for customers. In Texas, energy deregulation allows customers to choose their energy supplier, giving them the ability to manage their energy consumption and reduce their energy costs.
The deregulation of the energy market in Texas began in 1999 when the Texas Legislature passed Senate Bill 7, which aimed to increase competition in the state’s energy market. This law allowed for the creation of a competitive retail market for electricity, with multiple retail electric providers (REPs) offering consumers the option to choose their electricity provider.
Prior to the passage of Senate Bill 7, the energy market in Texas was regulated by the Public Utility Commission (PUC) of Texas, which set the rates for electricity and natural gas. The idea behind deregulation was to introduce competition and lower prices for consumers by allowing different REPs to offer different rates and plans.
While the deregulated market initially resulted in lower energy prices for consumers, it also led to some unintended consequences. One of the most significant was the 2011 Texas power crisis, which occurred when a combination of extreme weather and high demand led to a statewide power shortage. The crisis resulted in rolling blackouts and skyrocketing energy prices, as some REPs were able to charge exorbitant rates due to the increased demand.
Customers have the ability to choose between different energy suppliers that offer various energy plans with different energy rates. These energy suppliers compete for customers’ business, which can lead to lower energy prices for customers.
However, with so many different energy providers and plans available, it can be challenging for customers to navigate the market and choose the right energy supplier and plan for their energy needs.
This is where an energy broker can help. An energy broker can offer customers expert guidance and advice on navigating the energy market and finding the best energy plan for their unique energy consumption patterns.
Ways Energy Brokers Can Help
Energy brokers are experts in the energy industry and can help customers in many ways. Here are some of the ways energy brokers can help:
- Market Intelligence: Energy brokers have in-depth knowledge of the energy market and can provide customers with market intelligence that helps them make informed energy decisions.
- Energy Procurement: Energy brokers can help customers with energy procurement, negotiating the best energy rate and contract terms on their behalf.
- Energy Management: Energy brokers can help customers manage their energy consumption and reduce energy costs through energy efficiency and renewable energy solutions.
- Contract Management: Energy brokers can help customers manage their energy contracts, ensuring that they understand each energy plan’s terms and conditions.
- Risk Management: Energy brokers can help customers manage the risks associated with energy procurement and supply, ensuring that they are protected from unexpected changes to the energy market.
Choosing the Right Energy Broker and Energy Supplier
When choosing an energy broker, it’s essential to consider several factors to ensure that you find the right broker for your energy needs. Here are the top things to consider when choosing an energy broker:
- Track Record of Success: When choosing an energy broker, it’s essential to look for someone with a track record of success in the industry. This includes having market intelligence and a deep understanding of the energy procurement process. A good broker will also have a solid track record of successful negotiations with energy suppliers, which can result in significant savings for their clients.
- Market Expertise: Different energy suppliers offer different energy options and plan features, so it’s essential to find the right one that meets your energy needs. A good broker will have the knowledge and expertise to understand each energy supplier’s strengths and weaknesses and help you choose the right one that aligns with your business goals.
- Relationships with Energy Suppliers:
One of the top ways energy brokers can help their clients is by understanding the energy market and staying up-to-date on the latest changes to energy prices and contract terms. This knowledge can help energy brokers negotiate the best energy rate and contract terms on behalf of their clients. Energy brokers also have relationships with energy suppliers and can leverage those relationships to get their clients the best deal possible.
- Reducing Consumption:
In addition to finding the right energy supplier, a good broker will also be able to help you reduce your energy consumption and increase energy efficiency. This includes offering energy management solutions and tools to track and manage your energy use. By reducing energy consumption, businesses can not only save money on their energy bill but also reduce their carbon footprint.
- Sustainability: Lastly, it’s important to choose an energy broker who understands the importance of renewable energy and sustainability. With the increasing emphasis on reducing carbon emissions and transitioning to a clean energy economy, it’s important to work with an energy broker who can help you navigate the growing market of renewable energy options.
Language to watch out for when choosing an energy broker
Yes, here are some specific words or phrases to watch out for when choosing an energy broker:
- “Exclusive” or “proprietary”: If a broker claims to have an “exclusive” or “proprietary” relationship with a specific energy supplier, it could limit your ability to shop around and find the best energy rate for your business.
- “One-size-fits-all”: If a broker claims to offer a “one-size-fits-all” solution for your energy needs, it’s a red flag. Every business has unique energy usage and consumption patterns, so a good broker should tailor their services to meet your specific needs.
- “Limited-time offer”: If a broker tries to pressure you into signing a contract by claiming that a certain rate or deal is only available for a limited time, it could be a sales tactic to rush you into making a decision without fully understanding the terms of the contract.
- “We’ll take care of everything”: If a broker claims that they will handle everything for you and you don’t need to worry about anything, it could be a sign that they are not transparent about their fees or the terms of the energy contract.
- “No risk”: If a broker claims that there is no risk associated with their services or that you have nothing to lose by working with them, it’s important to ask questions and understand exactly what they mean. All energy contracts come with some degree of risk, so a good broker will be upfront about the potential risks and how they can help you mitigate them.
When choosing an energy broker, there are several red flags to watch out for that could indicate an unreliable or untrustworthy broker. Here are some language cues to keep an eye out for:
- Guarantees of savings: No energy broker can guarantee savings because energy prices fluctuate and can be affected by a variety of factors, including weather, supply and demand, and global events. If a broker promises a specific amount of savings, it’s likely too good to be true.
- Lack of transparency: If a broker is not transparent about their fees or the terms of the energy contract, it could be a sign that they are trying to hide something. A good broker will be upfront about all costs and charges associated with their services.
- Limited options: If a broker only works with a select few energy suppliers, it could limit your ability to find the best energy plan for your business. A good broker will have relationships with multiple energy suppliers and be able to provide you with a range of options to choose from.
- Pushy sales tactics: If a broker is pushy or aggressive in their sales tactics, it could be a sign that they are more concerned with making a sale than helping you find the right energy solution for your business.
- Lack of market knowledge: A good broker should have a deep understanding of the energy market and be able to provide you with insights and recommendations based on their knowledge and experience. If a broker seems uninformed or unable to answer your questions, it could be a red flag.
Want to check out more? Be sure to read this article from Niccolo on the essential 2023 comparison sites to get the best energy deals.