Energy Broker Fees.

Energy brokers earn sales commissions from selling electricity and natural gas by adding broker fees or margins to retail energy supplier rates. In order to understand this, one must understand how energy brokers work with energy suppliers. In deregulated energy markets, retail energy suppliers offer rates to energy brokers for their customers with the energy supplier’s margin already built-in. The broker, in turn, adds a broker fee to that rate and then offers the total price to the customer. An example of how this works is below:

  • Retail Energy Supplier Rate = $0.060/kWh
  • Energy Broker Fee = $0.005/kWh
  • Total Customer Price = $0.065/kWh

Energy brokers are then compensated by energy suppliers for selling electricity or natural gas contracts to their customers. Broker commissions are determined by the total Broker Fees x Customer Energy Consumption. An example of how this works is outlined below:

Month Electricity Usage (kWh) Broker Fee ($/kWh) Broker Commissions ($)
JAN 24,000 $0.005 $120
FEB 27,000 $0.005 $135
MAR 12,000 $0.005 $60
APR 13,000 $0.005 $65
MAY 17,000 $0.005 $85
JUN 21,000 $0.005 $105
JUL 30,000 $0.005 $150
AUG 25,000 $0.005 $125
SEPT 16,000 $0.005 $80
OCT 15,000 $0.005 $75
NOV 20,000 $0.005 $100
DEC 21,000 $0.005 $105

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