To Make Sure You Get the Best Deal, Ask Your Utility Management Broker These 6 Questions
As business owners, we are always looking to get the best in everything from our providers and partners, and utilities are no exception. Almost everyone relies on electricity, water, and gas providers, and we all know how costly and frustrating disruptions in these services can be.
Furthermore, navigating the utility markets can be far more difficult than it seems it should be. Contracts must often be executed within hours of being issued because the rates change quickly. Many providers will charge you higher prices if your contract expires and you continue to use them without negotiating a new agreement, leading to many business owners paying far more than they ought to for months or years on end. To make matters worse, utility suppliers often make significant errors in their accounting, many of which require a keen eye and industry knowledge to identify, correct, and get refunded.
These are just a few of the reasons that many business owners can save money by hiring a utility management broker. However, not all brokers work the same way – and there are several key questions that you need to ask a prospective or new utility broker to determine if they’re truly on your side and working to get you the best possible rates, contract terms, and service.
When you ask these six questions, you can learn a lot about your broker, their service, and what you can expect from them.
Which suppliers do you work with?
Some utility brokers work regularly with a small number of suppliers because these companies provide the broker with preferential commissions. However, this should never be why a broker chooses a particular supplier – your broker’s job is to get you the best possible deal, not them. If they only work with a small number of suppliers, be sure to ask why this is and if they are being paid commissions.
Can I choose which supplier we work with?
You should have the freedom to choose with suppliers your company does business with. If your broker refuses to let you make this decision, it is an immediate red flag that the broker is likely choosing suppliers based on the commission they receive, not the service or rates offered to you.
How much do you charge for your services?
If an energy broker ever tells you that their services are free and that they are paid by the supplier, they are lying to you. In this situation, the broker’s commission is a hidden cost added to your contract, and your supplier does this to pass the broker’s fees on to you. It may not be obvious, especially since this fee is agreed upon between the broker and the supplier, and is rarely listed as an itemised expense on your utility bill, making it easy to hide how much you’re being charged – as well as how much you could have saved by working with another broker.
What does my utility management service include?
Many brokers say that their services are “all-inclusive” – but don’t clarify what exactly that means. In fact, many brokers offer a minimum basic utility procurement service, but then charge additional fees for any other services you may need. Follow up this question by asking if your broker considers contracts of different durations, and if so, what the basis for their recommendations are. If the broker says yes and bases their decisions off of market conditions, you’re likely in good hands. Additionally, find out if the broker sends termination notices to suppliers – a service many charge additional fees for.
How much will you be paid by the supplier as commission?
TPI agreements may indicate that brokers will disclose this information if asked – if so, simply ask them, and they will tell you how much they are paid in commissions. If needed, you can click [here] to download a template giving your supplier permission to disclose the commission paid to your broker, and click [here] to download a draft letter that you can send to your supplier in order to find out what they are paid in commission.
You may be paying significantly more than you should be for your broker’s services – especially if they have told you that their service is free!
Will I have a dedicated account manager?
Many energy brokers have an email-based ‘ticket’ support system. However, these can lead to long delays and frustrations, especially if you are constantly in contact with new support teams and individuals who aren’t familiar with your business’s specifics needs and challenges.
However, if you have a dedicated account manager on your team who knows you and understands your portfolio, you can call them whenever you have problems or even simply need questions answered – and this can save you time and hassle.
When you’re next considering hiring a utility broker – or if you’re currently considering alternatives, you should know that at Clifford Talbot Partnership, we provide all-inclusive utility bureau services with no hidden fees. Each of our clients has a dedicated account manager, making communication fast, direct, and clear. If you have any questions or would like to schedule a no-fee, no-commitment consultation, feel free to contact us today.
Further Reading:
Ofgem: Third Party Intermediaries: what your business needs to know
