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Energy Insights

The Secret to How Brokers Help Find the Best Deals

With over 25 energy retailers competing in Australia, business owners face a complex maze when securing new electricity and gas supply contracts. Rather than go it alone, smart companies engage the services of independent energy brokers to objectively compare offers across the market and help them find the best rates, deals, and incentives on their behalf. This guide explains how brokers conduct comprehensive energy comparisons, making your next procurement decision easy.

Here are the points expanded in more detail:

How Energy Brokers Help Find the Best Deals

Usage Analysis

  • Collect 12-36 months of electricity and gas usage data including volumes, demand profile, and hourly/seasonal consumption patterns.
  • Analyse usage coincident with weather to devise a usage model tailored to your unique operational characteristics.
  • Meet to detail major equipment loads and production schedules to incorporate into procurement strategy.

Model Plan Options

  • Assess different rate structures like fixed, variable, peak/off peak, capacity charges based on your unique usage model.
  • Create different pricing scenarios like best/worst case to simulate under different rate plans and contract terms to minimise budget risk.
  • Model add-ons like solar PPAs or demand response enabled plans to assess whole potential savings.

Competitive Tender

  • Run a transparent reverse auction style tender providing normalised usage data to retailer reps.
  • SetClear rules of engagement, timeline and requirements from day one to drive bid competition.
  • Create tension by maintaining ongoing dialogue with multiple supplier reps in parallel.

Compare Quotes

  • Receive 20+ standardised quotes tailored to your operations to enable direct comparisons on price and non-price factors.
  • Adjust non-standardised quotes through modelling based on market knowledge to normalise differing terminology and contract structures.
  • Rank and shortlist options using Total Cost of Ownership calculations encompassing all fees, terms etc.

Negotiate Contracts

  • Actively negotiate with 2-3 shortlisted retailers using levers like volumes, contract flexibility and loyalty to further improve pricing.
  • Secure additional incentives like sign-on bonuses, price protection clauses or feature adds through negotiation leverage.
  • Finalise contractual fine print with the optimal provider to maximise value and energy risk protection for your business.

Why Brokers Perform Better Comparisons

Pricing Insights

  • Understand complex interrelationships between wholesale commodity costs, network/policy charges, retail margins and non-price fees that determine pricing.
  • Track different cost components like LGCs, STCs and ancillary service charges and how they influence movements in market rates.
  • Maintain insider market intelligence through daily pricing desk monitoring and close retailer relationships to inform strategy.

Usage Impact Modelling

  • Tailor plan analysis and recommendations to your unique hourly consumption patterns, demand levels, power factor and operating environment using robust data models.
  • Assess the cost impact of different rates structures against your usage characteristics - when you consume energy is just as crucial as how much you consume.

Quote Normalisation

  • Adjust non-standardised quotes using in-depth pricing expertise to account for unique retailer terminology, contract language, incentive differences, and variable rate components.
  • Enable precise head-to-head comparisons on a like-for-like basis across a broad range of tailored plan options.

Objective Benchmarking

  • Independently assess the entire competitive retailer market without any commercial attachments to individual providers.
  • Quantify expected cost under each option using your usage model to make data-driven recommendations selecting the optimal market deal.

Key Steps in the Energy Broker Comparison Process

1. Usage Profile Analysis

  • Collect 12-36 months of billing and meter data from all your sites and utilities.
  • Analyse usage amounts, daily/seasonal patterns, peak demand and power factor.
  • Identify major usage components like production, HVAC, lighting.

2. Retailer quote solicitation

  • Run a transparent tender process among reputable electricity and gas retailers.
  • Provide normalised usage data for precise tailored quotes.

3. Rate and Plan Modelling

  • Assess different rate structures - fixed, variable, peak/off-peak, demand charges etc. based on your usage characteristics.
  • Model expected costs across prospective plans to compare and identify optimal solutions.

4. Contract Analysis and Benchmarking

  • Compare length, termination clauses, escalation rates, incentives, non-price terms.
  • Normalise non-standardised quotes using modelling and insider market knowledge.

5. Price Negotiation

  • Actively negotiate with supplier reps by phone and email to improve on initial quotes.
  • Leverage volumes, consumer choice data, loyalty and contract flexibility to earn discounts.

Getting Started with an Energy Broker

Follow these tips when engaging a broker for upcoming procurement:

  • Ask for recent case studies showing achieved client savings in your industry and location.
  • Require regular progress reporting and full quote benchmarking data for transparency.
  • Check licencing, certifications, professional indemnity insurance and industry association membership.
  • Ensure they operate on a "supplier-pay" model so you never directly pay broker fees.

Conclusion

By leveraging the purchasing power, insider knowledge and active negotiation of experienced energy brokers, Australian businesses can capture significant savings often 20% or higher compared to retail rates. Take the hassle out of energy procurement while maximising value - let the energy brokers help you find the best deals.

FAQs

What usage information do brokers need for effective tendering?

Provide 12-36 months of electricity and gas invoices showing usage volumes and demand along with interval meter data if available. Details on major equipment loads also helps.

How much should I expect to save using an energy broker?

While savings vary based on market conditions, brokers typically capture savings of 10-25% compared to your current rates for most businesses.

What fees should I expect to pay the broker?

Reputable brokers operate on a "supplier-pay" model so your company pays them no direct fees. They earn commissions from winning retailers.

How long does the broker procurement process take?

Allow 2-4 weeks for the broker to collect your data, issue tender, evaluate offers and negotiate contracts. Quick turnarounds can be arranged for expiring agreements.

When should I engage a broker prior to renewal?

Ideally 6 months in advance of contract expiration so they have flexibility to capitalise on market dips and negotiate better terms.

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