You’ve worked our way up to the lofty position in the business that you are now responsible for the Energy Procurement? You’ve had a look at your bills and what you didn’t realise is that the scientific writing degree you laughed at in the open university booklet in 1989 would have really came in handy about now! So, you investigate who can help… you’ve cracked it, you’ll get a business energy consultant!
But, how do you know they are right for you and your company?
The industry now seems to have a reputation for aggressive cold calls, huge uplifts for business energy brokers and questionable methods to get contracts signed. Justly so in some instances, I hear on almost a daily basis from customers who have been mis sold or just didn’t understand what they were agreeing too when dealing directly with a supplier or with a broker.
I wanted to offer some advice on two areas here, firstly on what you should be asking your business energy consultant when choosing one and secondly some information on what they are doing for you as a business.
Important questions to ask your business energy broker:
- Which suppliers will you be approaching to get us pricing?
If the answer to this isn’t the whole market, then why not? Sometimes a business energy consultant is aligned to certain suppliers, this doesn’t always mean you get the right contract due to lack of variety. More suppliers means more competition to get the right deal.
- How many prices will we be offered?
Sometimes the broker will condense the offer. This will be due to them invariably being uncompetitive, but you should be offered multiple contract providers.
- What do you do to help if we decide to change suppliers?
Your broker should take this hassle away from you in its entirety. Once you have signed a Letter of Authority (LOA), they have the relationships to manage this. The should raise the termination notice as well as logging the supply with the new supplier. If they aren’t, what are you paying them for?
- What services do you offer us during the contract term?
Your business energy broker shouldn’t disappear quicker than a cupcake at my family’s parties once the contract is signed. You are paying for their services for the contract term in my opinion. If you have a problem with your supplier, the supply or billing your broker should be your first point of call. They have the relationships they used to lock the contracts in, why should you have to sit on the phone to customer services for 6 hours?
- How will we be charged for these services?
These additional services should be included in the fee you have paid from the contract. If they are charging you for dealing with your issues, then why? Was this set out at the point of signing a contract? Always check.
- How do you as a business energy consultant get paid?
My favourite myth in the energy industry… “Our service is free!” Now Luther Vandross and Janet Jackson said that “the best things in life were free” but I am not sure they included business energy broker fees in that song. This is a play on words, you will be told that the “supplier pays us”. Now this is technically true, but the broker has placed an uplift on you contract price to earn that fee. Of course, you pay for the service, we must earn a living and you are a businessperson, you understand that but please don’t be fooled into thinking that this doesn’t cost you as a business. OF COURSE IT DOES!
So, to let you into a little more of our world here is some advice for you to help manage your business energy broker.
Q) Do brokers always research the whole market?
A) No. Some brokers search the whole market, but some are aligned to single suppliers or small groups.
Q) Will Brokers always find me the best deal?
A) No. Brokers aren’t necessarily required to find you the best deal. Sometimes you can find a better deal if you are prepared to do the leg work but would recommend you benchmarking this price against a broker.
Q) Is agreeing a contract over the phone a binding contract.
A) Yes. A verbal agreement is binding. I recommend you ask for details to be sent in writing before agreeing so you can do some homework.
Q) Do you have to accept an offer from your broker?
A) No. make sure all services are clear and commission amount and terms of payment are agreed before you go ahead.
Q) Are all offers presented in the same way?
A) No. Some suppliers and Brokers will strip factors out of their offer to make their price seem more competitive. Always ask if these prices are fixed and whether the FIT (Feed in Tariff) is included.
Q) is there a standard length for contracts?
A) No. Many contracts are a fixed term of 12/24/36 months so ensure you understand how long you are signing for. Remember that the rate for 12 months maybe less but in the current climate will you be paying a higher rate for the second and third year when you agree that price in 12 months’ time?
Hopefully this can help clear some of the confusion on the business energy broker market but if you want a frank, open and honest conversation please feel free to get in touch.