Found a Memphis restaurant paying $0.47/therm markup to their gas broker. Base MLGW rate is $0.68, broker rate is $1.15. That's a 69% markup! Client says broker promised 'market rates.' What's considered reasonable for commercial gas brokerage?
Broker markup on natural gas - how much is too much?
That's highway robbery. I usually see 5-15 cents per therm markup in South Dakota. Anything over 20 cents and I tell clients to shop around.
Texas is deregulated so markups vary wildly. Seen everything from 8 cents to 40 cents per therm. The key is comparing total cost, not just the markup. Some brokers have lower base rates.
Virginia is still regulated for gas so we don't see this issue much. But 47 cents is outrageous. That client needs to terminate immediately and go back to utility service.
Arizona has some bad actors too. Southwest Gas customers getting talked into contracts with 30+ cent markups. I always calculate the annual overpayment in dollars - makes the impact clearer.
Florida statute requires brokers to disclose markups in writing. Many don't comply. TECO and Duke Energy Florida customers often don't realize what they're paying.
Document everything and help clients understand their options. Many broker contracts have early termination penalties that need to be weighed against ongoing overpayments. Calculate payback period for termination.