Got contacted by an energy broker here in Dallas claiming they can cut our commercial rates by 15% through Oncor with some new tariff structure. They're asking for copies of 24 months of bills and want to sign us to a 3-year deal. The savings sound amazing but I've been burned before. Anyone worked with brokers in the Texas market? What red flags should I watch for?
Energy broker claiming 15% savings - too good to be true?
Marcus - been there! Had a broker in Delaware promise similar savings with Delmarva Power. Turned out they were comparing our peak summer rates to off-peak winter projections. Make sure they're using actual usage data and current tariff schedules. Also ask for references from similar-sized clients.
I've seen this pattern before. The legitimate brokers will walk you through the math line by line and show you exactly which tariff components they're optimizing. If they're vague about HOW they're achieving the savings, walk away. Also check if they're getting paid by the supplier - creates conflict of interest.
Frank makes a good point about the payment structure. I always ask brokers upfront - are you getting paid by us or by the supplier? Had one broker here in Knoxville with TVA territory who was getting 0.5 cents/kWh kickback from the supplier for 36 months. That 'savings' disappeared real quick when I did the math.
Good catches everyone. I pressed them on the payment structure and they admitted to getting paid by the supplier. When I asked for the exact commission amount they got cagey. Also noticed they were using our 2011 winter bills (lowest usage months) as the baseline. Thanks for the reality check.
Smart move pressing on those details Marcus. I've found the best brokers are completely transparent about their compensation and will put it in writing. They should also be able to model your savings using 12-24 months of actual data, not cherry-picked low months.
Had a similar experience with Ameren Missouri territory. Broker promised 12% savings but was comparing our current full-service rate to a bare-bones commodity-only rate. Forgot to mention we'd need separate contracts for transmission, capacity, and ancillary services. Total cost ended up 3% higher than status quo.
Elmer - that's the classic 'apples to oranges' comparison. Always insist they show total delivered cost including all fees, not just the generation rate. Learned that lesson the hard way with FirstEnergy a few years back.