We've been approached by an energy broker here in New Orleans who claims they can cut our commercial Entergy bills by 40% through some kind of "demand response optimization program." They're asking for copies of 24 months of bills and want us to sign an exclusive consulting agreement. The sales pitch sounds too good to be true - has anyone worked with brokers making these kinds of claims? Our current demand charges are running about $8,500/month on the LGS rate schedule and I'm skeptical anyone can cut that by nearly half. What red flags should I be watching for?
Energy broker claiming they can reduce our Entergy bills by 40% - too good to be true?
Juan, I'd be very careful with those kinds of promises. Here in Knoxville we had a similar broker approach us claiming 35% savings on our TVA bills. Turned out their "optimization" was just basic power factor correction that we could have done ourselves for a fraction of their fee. They wanted 25% of any savings for 5 years! Did they explain specifically HOW they plan to achieve these reductions? Demand response programs are legitimate but 40% savings sounds like marketing fluff to me.
Terry's right to be skeptical. I work with Georgia Power accounts and legitimate brokers will break down exactly where savings come from - load shifting, power factor improvement, rate schedule optimization, etc. The good ones don't ask for exclusive agreements upfront either. Ask them for references from other Entergy customers and actual case studies with before/after bills. If they won't provide specifics or keep pushing the exclusivity angle, walk away. What's your current power factor running? That's usually the easiest target for quick savings.
Thanks for the reality check. Our power factor has been running around 0.85-0.88 so there's probably some room for improvement there. The broker was very vague about specifics - kept talking about "proprietary algorithms" and "exclusive utility relationships." When I pressed for details they said they couldn't reveal their methods due to competitive reasons. That should have been red flag #1. They also wanted a 20% cut of savings for 3 years which seemed excessive. I think I'll pass on this one and maybe look into the power factor correction myself.
Smart move Juan. I've seen too many facilities get locked into bad broker deals down here in Mississippi. For Entergy customers, the real opportunities are usually in demand management during peak hours and getting on the right rate schedule. With your load profile you might benefit from their time-of-use rates if you can shift some operations. A legitimate energy consultant should do a free preliminary assessment and only get paid if they actually deliver documented savings. The "proprietary algorithm" line is classic snake oil territory.
This thread is hitting home for me. We just terminated a contract with a broker in Atlanta who promised 25% savings on our Georgia Power bills but delivered maybe 5% after 18 months. Their "optimization" turned out to be switching us to a different rate schedule that we could have requested ourselves. Paid them $12,000 for something that took one phone call to the utility. The lesson: if you can't understand and verify their proposed savings methodology, don't sign anything. Get everything in writing including exactly how savings will be calculated and measured.
Greg's experience mirrors what I've seen with FPL accounts here in Florida. The legitimate energy advisors I work with are upfront about their methods and usually focus on low-hanging fruit like power factor, demand management, and rate optimization. They also don't mind if you want to verify their calculations independently. The sketchy ones rely on complex formulas and proprietary software that no one can audit. Juan, you're absolutely right to trust your instincts on this one.
Great discussion here. I've dealt with my share of energy brokers over the years and the red flags Juan mentioned are spot on. Any broker worth their salt should be able to explain their savings methodology in plain English and provide verifiable references. The 40% savings claim is almost certainly unrealistic for a typical commercial account unless there are major inefficiencies or billing errors involved. For Entergy customers, I'd recommend starting with a basic energy audit to identify real opportunities before engaging any third-party consultants. Sometimes the biggest savings come from fixing simple billing mistakes that don't require any broker fees at all.