Latest Blog From Energy Renewals
How To Choose Your Energy Broker
By Ken Warner, Managing Director, Energy Renewals
Increasingly businesses big, small and micro are handing over their energy management to third party specialists who use their expertise to both broker some of the best deals available in the market and identify ways to reduce consumption to lower bills further.
But with so many brokers out there, how do companies select the best one?
To help you decide who to partner and whilst we hope you choose us, we’ve set out below what we think you should consider before you sign on the dotted line.
1) Cheapest Is Not Necessarily The Best
With energy prices on the up and predictions that this trend is set to continue, it would be tempting to sign up for what appears to be the cheapest deal on the table. But you need to be confident you’re comparing like with like. Recently we’ve seen deals which are tariff only and excludes the non-commodity costs such as the Carbon Levy which increasingly make up a large chunk of your bill. In addition, we see prices quoted which require you to switch off or use a different energy source at times of huge pressure on the national grid or incur premium charges.
2) Provide Full Explanations
To make an informed decision about your energy partner and the contract you agree, full explanations on how the costs are made up should be provided. Thus, everything and more outlined in our first point is explained in layman’s terms so you know exactly how the bill breaks down and there are no hidden costs or nasty surprises which emerge after you’ve signed the deal. Remember, many deals are fixed for as long as four years so be sure to know exactly what you’re signing.
3) Know Your Supplier
We all know the so-called Big Six, but there are a host of other suppliers out there many of which provide some highly competitive tariffs. Don’t be concerned if the supplier your broker uses on your behalf isn’t one of the big players. However, your broker should provide you with details of your supplier as well as the nitty-gritty of your contract and the costs. Also find out how many suppliers your broker deals with which will give you a good idea of how hard they’re working on your behalf to find you the best tariff. Don’t be afraid to ask to see comparable quotes from the broker’s variety of suppliers. Ideally your broker should be working with all suppliers in order to provide you with the best possible tariff which suits your individual requirements. Finally, check the array of suppliers your broker places business with and be wary if the same few pop up regularly, this could indicate they offer the broker more favourable terms and not necessarily the end user.
4) Bill Checking
The amount you pay should be continually scrutinised by your broker to ensure you are not paying out unnecessarily. Your broker should also negotiate any reductions which your account manager might deem fair.
Businesses do have certain obligations as far as their energy and usage is concerned such as displaying energy certificates, your broker should undertake this on your behalf and, of course, explain everything to you.
6) Reducing Your Carbon Footprint
As part of your energy management programme, your broker should be actively seeking ways for you to reduce your consumption and therefore lower bills including the use of smart technology.
One way to understand your energy consumption and your opportunity to reduce it is by benchmarking your performance with other similar sized businesses. Your broker should be able to show you how similar businesses manage and have improved their energy consumption.
8) Getting The Backing Of Employees
Your energy reduction strategy will only work if you have backing from your staff so make sure your energy partner has plans in place to help you train and engage employees.
9) One Point Of Contact
Having one point of contact makes dealing with your energy broker easier. Ask for a named account manager whose job it is to look after your interests long after you’ve signed your energy contract.
10) Utilities Intermediaries Association membership
Membership of the UIA indicates you’re dealing with a reputable company and check your broker has signed up to the Third Party Intermediary (TPI) Code of Practice, which governs standards of behaviour and customer service.
Your broker should disclose all details of how they operate and the suppliers they have approached on your behalf as well as how they make their money. Generally, brokers earn money from commission they gain from placing business with a particular supplier. Your broker should be working in your best interests and not in the interest of securing themselves the largest possible commission. Asking your broker to disclose commission information will soon throw light on whose interests are more important. Your broker should also make comparisons with your current bill and highlight the differences and savings, an exercise that should be undertaken annually so you can keep track of your costs and to ensure you are on the best tariff.
12) Hard Sell & False Claims
Anyone using the kind of hard sell tactics that would have you running to hills as a consumer should have the same effect if deployed in business. Be cautious of brokers who claim their services are ‘free’, this just isn’t true, all businesses have to generate their income from somewhere. Likewise, if the broker claims the supplier ‘pays us’, you should question their impartiality.
13) Your Agreement
Trustworthy brokers will ask you to sign a letter of authority to say they are acting on your behalf, make sure you read it carefully and if there’s anything you don’t like or understand, be sure to ask for clarification, and if you are still not convinced, don’t sign. You may also find your contract is in fact a verbal one which is recorded on the phone, ask your broker for a copy of the recording and you should also receive an email confirming your agreement shortly after your call. Your broker is also subject to data protection laws so make sure they guard your privacy.
Most brokers will include testimonials on their website, these should be from named contacts with their position and company clearly stated. If you would like to see more, you should ask to see references from clients or even arrange a call to check they are completely happy and, importantly, the length of the relationship, with the broker you are considering. Don’t be afraid to ask about the professional qualifications and experience of the people in the business who you are dealing with so you can gauge the level of expertise of your broker.
15) Service Level Agreement
Asking your broker to set out the levels of service you can expect will help you determine their commitment to customer service.
16) Are the Registered with the ICO?
It is very important and reassuring to know that your broker will keep your personal information safe and private. They should be compliant of the Data Protection Act.