Had to share this story as a warning to others. Been working with the same energy broker for 3 years on several large commercial accounts here in Tulsa (PSO territory). Original deal was great - saved our clients about 18% on supply costs. But when renewal time came around, the broker presented new rates that were actually HIGHER than current utility default rates. When I questioned it, they claimed market conditions had changed. Did my own research and found better rates from multiple suppliers. Turns out the broker was padding renewal rates to increase their commission. Always do independent verification, especially on renewals.
Broker tried to screw us on renewal - lesson learned
Rick, thanks for sharing this. It's unfortunately more common than people think. Brokers sometimes get complacent on renewals, figuring clients won't shop around. Here in Memphis, I always recommend getting quotes from at least 2-3 brokers before renewal, or better yet, reach out directly to suppliers yourself. The broker should be saving you time and money, not the other way around. Did you end up firing this broker?
Randy, yes we terminated the relationship immediately. What really bothered me was that they tried to justify it by saying they were "protecting us from market volatility" with longer-term contracts at higher rates. Complete nonsense. Found out later they had negotiated higher commission rates with certain suppliers, which explained the inflated pricing. Now I require all brokers to disclose their exact commission structure and I verify all quotes independently.
This is exactly why I always build renewal review periods into broker agreements. 90 days before any contract expires, I require them to provide market analysis and competitive quotes. If their renewal pricing isn't competitive, I have time to find alternatives. Also learned to never auto-renew anything - always make it a deliberate decision with fresh market research.
Cindy's approach is smart. I'd also add - keep your own records of market pricing trends. Don't rely solely on what brokers tell you about market conditions. There are plenty of public sources for energy price indices. A broker claiming massive price increases should be able to point to specific market factors, not just make vague statements about "volatility."
Absolutely right, Randy. I use EIA data and regional ISO pricing reports to track trends. If a broker's story doesn't match public market data, that's a huge red flag. Education and vigilance are our best tools against this kind of behavior.