Presenting Retail Energy Price Quotes.
So you have a customer who wants to sign up with a supplier, and now you need to present a price quote. Preparing and presenting energy supply quotes are the foundational tasks performed by retail energy brokers. And, in order to do this properly, there are many concepts to grasp. From LOAs and LOEs to wholesale electricity pricing, here are the do’s and don’t of properly presenting supplier prices to your customers.
Comparison Of Energy Suppliers
First, it’s important to show a true apples-to-apples comparison of all supplier and utility quotes. Some suppliers will quote prices without taxes and other components, while others will quote “all-in” rates. Detailing the specific components of the price quote is always a good idea so your customers truly understand their options. Here is a simple chart outlining how you could present multiple supplier quotes:
| Price Components | Supplier A | Supplier B |
|---|---|---|
| Total Price | $0.083/kWh | $0.079/kWh |
| Energy | Included | Included |
| Capacity | Included | Included |
| Transmission | Included | Included |
| Swing | 100% | 25% |
In the example above, Supplier B appears to have a cheaper rate due to the constrained swing or bandwidth requirement. It is important to list out the major contract terms that might affect the price.
Energy Contract Details
Another key element you want to highlight in your quote comparison is the major differences between each supplier’s energy contract terms. It’s important to be able to decipher the energy contract language so that you can explain it to your customers in layman’s terms. Be on the lookout for energy bandwidth clauses, early termination fees, contract renewal terms, and hidden energy pass-through charges.
Electric Load Factor
Some customers that have poor load factor ratings might be wondering why their price quotes are higher than their neighbors. Another element of your price comparison should include the customer’s load factor rating. You can usually get this information from the retail electric supplier(s) providing the quotes. If the customer’s load factor is low, this presents a great opportunity to explain your energy efficiency solutions, help your customer understand the calculation of their business energy consumption, and even talk about developing an energy efficiency strategy for the future.
Utility Price To Compare
It is also important to inform your customers of the local utility price to compare. In most deregulated energy markets, the utility price to compare is the default service rate should a customer elect to remain with the utility company for energy supply. In Texas, customers must choose a retail supplier, or be placed on the supplier of last resort’s pricing.
Utility rates typically fluctuate up and down with the energy market. In some states, these rates change monthly, while in others they change quarterly or semi-annually.
It is important to always know the current price to compare so that you can inform your customer of his or her options. In rare cases, it might make sense for the customer to remain with the utility. In other cases, this is a great way to display value and savings when comparing supplier rates to local utility rates.
Pro Tip: Remember, you are typically offering your customers a 12, 24, or 36 month fixed-rate contract with a supplier. It is unfair to compare the current utility price to your 3 year agreement. A better way to make a true comparison is to look at historical utility price averages.
More Energy Pricing Tips To Keep In Mind
Remember, your customers do not understand energy matrix pricing, custom energy prices, business energy quotes, or supplier contract language. They only see what you are presenting to them. It is important to be an effective communicator, excellent in your negotiation with energy suppliers, and a true resource for your customer. If you do all of these things properly, you are well on your way to becoming a better energy broker and earning six figures by selling electricity.
Need Help Presenting Energy Quotes?
In summary, how you prepare and present energy quotes will determine your success as an energy broker. It’s important to be detailed, clear, and to be able to answer your customers’ questions. If you need help putting together an energy supply quote for one of your customers, contact our team! Did you know that Diversegy’s sales partners enjoy an extended level of support from our back office team. We can help you create customer price quotes, put together agreements, and even help you close sales. Interested in being a sales partner? Contact us tdoay!
