5 Ways to Protect Your Business from Bad Energy Brokers

5 Ways to Protect Your Business from Bad Energy Brokers

By Kurt Backert

March 26, 2018 – Clients tell me all the time: “I get a call every day from one of you brokers. It’s getting to be overwhelming.”

I get it – it’s tough trying to figure out who you can take seriously in the energy industry. The marketplace has become flooded with “brokers” in the last couple years. It seems like every other day, we hear of some new startup group that’s led one of our clients astray.

But the broker model is not my model. I’m an energy advisor – and there is a clear difference. This means not only handling your business’ energy procurement, but also your efficiency upgrades and results tracking afterwards. Unlike a broker, my job doesn’t stop after you’ve signed on the dotted line.

Another part of my job is protecting your business from the bad practices of energy brokers. Here are five ways that I help my clients do that.

Don’t tolerate misleading behavior.

One of the more common tricks brokers use is pretending to be your energy supplier. This gives the appearance of cutting out the middle man so it seems like you’re negotiating your energy contract terms directly. In reality, there are two things wrong with this:

  1. You’re working with someone who’s not being honest about who they are.
  2. You’re left without the ability to get multiple quotes.

When you purchase energy, you want to be negotiating from a position of power. So when you get a call, ask if you can see pricing from multiple suppliers. Multiple suppliers competing for your business in a choice market means lower prices and greater cost savings for you. Advisors like us are happy to show you options.

Demand professionalism in buying energy.

Professionalism in the energy industry means openness and honesty. But energy brokers aren’t always willing to share as much information as they ask of you. It shouldn’t be a one-way conversation. A discussion with a good energy professional should leave you feeling comfortable and empowered.

When you get a call, here are some things you should ask for more detail:

  • Their company.
  • Suppliers with whom they work.
  • What they know about your business.
  • Clients like you they’ve helped.
  • Additional information you can review after the call.

Never make a decision or give verbal authorization for anything on the first call. If you feel pressured to do so, then this is not the partner for you.

Energy advisors love talking about these things. We want to earn your trust by finding you the solutions to your business’ specific challenges. It’s one of the most enjoyable parts of our job.

Reinforce your risk tolerance.

When you talk to an energy professional, be upfront about your concerns and what you can’t afford to lose. Ask questions and have them talk you through it. When’s the best time to sign? Will rates go higher or lower? What’s best for my business? Understanding of timing, rates and any risks is essential.

No one can predict the future. But any broker who isn’t comfortable discussing the specific risks associated with energy purchasing for your business is not one with whom you should work.

Energy advisors encourage clients to discuss risk so we can better advise them on every part of their energy strategy. We don’t like surprises either.

Request a needs analysis.

Supply, storage, weather – there are so many forces that cause the energy market to rise and fall. But brokers don’t always look at the whole picture with these things. All too often, they’re only worried about getting you to sign a contract as quickly as they can.

It’s short-sighted. A broker who can’t show you how the changing energy market relates to your business won’t be able to deliver the value that you need.

To better serve our clients, energy advisors conduct a needs analysis. This analysis will both address your organization’s risk tolerance and provide a recommendation specific to your energy needs.

Ask about market volatility.

Energy markets have varying degrees of volatility. That volatility plays a big part in the value of your energy agreement depending on whether you’re on a fixed or indexed price. You should be skeptical of a broker who can’t explain market volatility as it relates to your business’ risk tolerance. Their failure to do so could mean you’re consuming or paying more than you need.

Patience is a virtue not lost on energy advisors. Energy agreements can sometimes take weeks or months to hammer out. But that’s not because one party or the other is too busy. Much of that time is spent waiting for ideal market conditions to develop.

Advisors are happy to keep you up to date on current market conditions and discuss volatility. We’re analyzing historical trends so we can share opportunities for your business to save money or mitigate risk.

Remember:

  • Don’t tolerate misleading behavior.
  • Demand professionalism in buying energy.
  • Request a needs analysis.
  • Reinforce your risk tolerance.
  • Ask about market volatility.

These are the types of frustrations that have made energy buying so overwhelming to many of my clients. But with 25+ years of experience, they’re also the things that I’ve learned to spot and protect them from every day.

Brokers sit across the table from you. Advisors sit right next to you. And I look forward to sitting down with you to find an energy agreement that brings value to your business.


About The Author

Kurt Backert from Nania Energy Advisors

Kurt is an energy sales professional based in Baltimore, MD., with more than 20 years of experience working with and providing value to Mid Atlantic commercial and industrial customers. Kurt’s acquired knowledge of the local utility tariffs and commodity markets helps ensure his clients” interests are best served. Having grown up in Baltimore’s rust belt, he has experienced working with customers from the heavy manufacturing industry to new technology and hospitality clients. His focus is maximizing his clients’ energy savings while keeping them educated in a dynamic energy environment.

Kurt can be reached via email at kbackert@naniaenergy.com or phone at 443-833-8223.

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