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The 5 Biggest Challenges Energy Brokers Have With Pricing




For energy brokers in deregulated energy markets, one of the most valuable services they can offer their customers is a direct line to energy suppliers to find the ideal product at the right price for them. Energy brokers are plugged into the rapidly changing landscape of energy prices that can ebb and flow based on supply and demand, new generation sources, and the inherently evolving marketplace.


However, this relationship doesn’t always run as smoothly as it could, as brokers can’t offer these opportunities to their customers without getting accurate and timely quotes from the energy suppliers. In particular for major customers who are looking to buy energy, such as those with large industrial facilities, swiftly reacting to changing energy prices and the associated landscape is necessary and time is quite literally money. So, when these customers go to energy brokers, they want instant information reflecting the accuracy and landscape instantaneously. But as all energy brokers have likely experienced at one point or another, those quotes aren’t always as easily acquired as they should be which creates real friction, customer dissatisfaction, and-- worst of all—lost sales.


What follows are the 5 biggest challenges that energy brokers will commonly run into when getting quotes from energy suppliers.


1. Pricing from the Energy Supplier Can Take an Hour and Up to Days

The most frustrating challenge for an energy broker is that the process of getting a quote can require a time delay from the supplier. When working with customers, instant information and quotes are the ideal, but more commonly than not it can take up to an hour to get those quotes. In an energy landscape that’s more and more reliant on intermittent resources like solar power and wind energy, the supply and demand mechanics can drastically change over the course of an hour. For those major energy customers hoping to get the best price for their power needs, the delay in quotes can and does eliminate much of the potential cost optimization that could be achieved.


Even worse is when the quote from the energy supplier extends from one business day to the next. When this type of delay happens, it creates a real problem because the buyer can’t count on getting that price the next day and the whole process is like a really costly and frustrating game of telephone.


2. Lack of Access to a Network of Suppliers Across the U.S. Deregulated Markets

In order for energy brokers to provide the most competitive quote and meet other customer needs—whether that’s in terms of how clean the energy being bought is, what type of specialized rate structures are available, or otherwise—they need access to as many different suppliers as possible. The more suppliers a broker can connect with, the more likely they are to find that “Goldilocks” of energy deal that’s just right for the final customer.


On the other hand, if a particular energy broker is hamstrung by having only a limited view into the world of potential options, that means the customer will be stuck with sub-optimal options. This reality can simply be equated to ‘shopping online’—if you need a widget and there are only one or two stores in town that stock it, you’ll be limited to the best deal in those locations. But if you have access to the online marketplace for widgets, you can truly find the best deal for you among a greater sea of options.


3. The Broker Must Put in A Lot of Manual Work to Get Pricing from Multiple Suppliers

While providing customer service and the perfect contract terms is the job of energy brokers, that part of the process is just the end result. Before providing these options to the customer, the energy broker is doing a lot of work to get the necessary information, and it’s not as simple as sending a quick ping or call to each supplier to find out the single price number they’re offering at the moment.


On the contrary, energy suppliers all come with their own individual nuances in what the contract terms look like, the timeframe of the offers, how they vary depending on other external and contract factors as more. For a single broker to check in with more than a few energy suppliers, it quickly becomes a cumbersome and timely mess, and those are time delays that are making the customers wait, seeing the terms change, all the while the customer gets itchy and ready to move on to the next broker.


4. Each Supplier Has Unique Load Factor Requirements

Another way in which the energy broker needs to filter through the numerous energy suppliers is the load factor requirements. Load factor is the data point that measures the relationship between a customer’s peak power demand and their total energy usage, and it provides insight into what the user energy demand profile is like. High peaks in energy usage, such as from a facility that has one incredibly energy-intensive machine it occasionally must turn on, create stress on the grid and when too much peak energy is used at the same time it can risk demanding more from generation and transmission assets than is available. As such, for these customers with high demand relative to their total usage, they may find that they actually get charged just as much, or even more, for the availability of peak energy usage during these short spurts than for the energy used during the rest of the month.


From an energy supplier perspective, they prefer to serve customers who have lower demand peaks and are more balanced and even energy usage. These customers are easier to plan for and won’t lead to supply disruptions, but the high demand customers still need quotes, too. So, every supplier will deal with this differently, whether putting a certain required load factor maximum or charging a rate structure that really penalizes such users. It’s up to the energy broker to navigate these unique load factor requirements and find the best opportunity for particular customers, which is an ever-present challenge.



5. Various Contract Terms, Products, and Contracts Can Be Difficult to Standardize and Compare

While each customer an energy broker deals with is unique, and that’s to be expected, energy brokers must unfortunately weather the fact that each supplier and their quotes are going to be frustratingly different in how they’re structured. The broker in the equation needs the ability to pull utility usage and then provide pricing just on what the customer can afford (otherwise you’re including too much information, irrelevant information, and the customer will quickly seek out the partner who can be more customized to their needs) and reframing each supplier’s options to line up with what information the customer cares about and needs is a heavy lift.


If the process were as straightforward as simply picking the lowest offered rate out of the few that were available, energy brokers wouldn’t be necessary, and the customers would be ready to make those decisions themselves. But because the world of energy supplier quotes is a tangled web of different structures, contract terms, time-depending rates, load factors, and more, energy brokers operate not only as the relationship with the suppliers to get the best rates but also the translator who can make sense of all these options.


BrokerX’s Solutions for These Challenges

These challenges are pervasive across the landscape of deregulated energy markets in the United States. Such markets provide a great opportunity for energy brokers to find customers, offer them truly enticing deals, and reduce the friction in the market. Unfortunately, thanks to these roadblocks that for too long have been inherent in the industry, things are never as simple as they could be.


Luckily, there is a solution to change that. Stay tuned to find out...





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BrokerX is a software solution for energy brokers that eliminates manual tasks through automation, providing more time to sell and grow their businesses. To learn more about our energy broker software, call 312-725-0028, email Matt@brokerxapp.com or click above to schedule a demo.

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