If you’re reading this article and you’ve been an energy broker for some time, chances are you haven’t thought about the financial strength of a supplier… unless you had customers with one that recently went bankrupt. The financial strength of an energy supplier is just as important as its price offer. After all, what good is the price if they will no longer be in business to honor it?
There have been many stories over the last few years of retail suppliers that went bankrupt and left customers hanging: Agera Energy, Liberty Power, and Sunwave Energy to name a few. In these cases, customers who thought they had a great fixed price for a long period of time were notified that their supplier was going bankrupt and their rate was no longer valid. Now, there were a few cases where another supplier purchased the customer and honored the rate, but many were left having to scramble.
And, as an energy broker, what about your commissions? If you had customers with any of these suppliers, you might have felt the pain of losing those residuals overnight.
Determining the strength of a supplier is not easy unless they are publicly traded. However, it is very important to learn your suppliers’ backing and whether or not they have the financial fortitude to weather a volatile market. The last thing you want to have to do is explain to a customer why their low, fixed-rate is no longer valid.