Got approached by an energy broker here in Indianapolis claiming they can save my client 15% on their current IPL industrial rate schedule. Client is on Rate 321 paying around $0.087/kWh all-in. Broker wants a 3-year contract and 20% of the first year savings as commission. This seems too aggressive - has anyone worked with brokers making these kinds of claims? What should I be looking out for in the fine print?
Broker claiming they can get me 15% savings on IPL rates - too good to be true?
Greg, I've seen similar pitches here in Tennessee with TVA territory. The devil is always in the details with these broker deals. Make sure you understand exactly what rate they're comparing against - some brokers use inflated "standard" rates that don't reflect actual tariff pricing. Also check if there are any early termination fees buried in the contract. 20% commission sounds pretty steep to me.
Had a broker pull this exact same move with one of my Cleveland clients on FirstEnergy territory last year. The "15% savings" turned out to be compared to a residential rate, not the commercial rate my client was actually on. When I ran the numbers, it was actually going to cost them about $2,800 more per year. Always verify their baseline assumptions independently.
Frank, that's exactly what I was worried about. The broker kept mentioning "standard published rates" but wouldn't give me the specific tariff schedule they were using for comparison. I'm going to request a detailed breakdown showing exactly which IPL rate schedule they're comparing against. Thanks for the reality check.
Another red flag is when brokers won't let you take the contract to review with your auditor. Legitimate brokers understand that commercial clients need time to analyze the terms. I've seen deals here in Chicago where the "savings" disappear once you factor in all the fees and rate escalators. ComEd territory has enough complexity without adding broker markups on top.
Yuri makes a good point about the pressure tactics. I had a broker in Youngstown try to get my client to sign same-day because the "rate was only good until 5pm." Turns out the exact same rate was available for weeks afterward. High-pressure sales combined with vague savings claims usually means trouble.
Update: Asked the broker for the specific IPL tariff comparison and haven't heard back in 3 days. I think that tells me everything I need to know. Client is staying put on their current rate schedule. Thanks everyone for helping me smell the BS on this one.
Good call Greg. The silence after asking for details is always the biggest red flag. You probably saved your client several thousand dollars by doing your due diligence. That's exactly why they need us auditors to review these deals.