In today’s digital world, there are opportunities for energy customers located in deregulated states to shop for electricity online. But, what does this look like for commercial and industrial customers who are used to working with energy brokers and consultants? Can these customers get better deals by shopping directly with energy suppliers on the internet? This article aims to answer these questions and explores the world of online energy supplier offers, their benefits and challenges, and the differences between using a broker or working directly with suppliers online.
Can Commercial Customers Shop Online For Electricity?
The short answer is, yes; however, shopping for commercial energy rate offers online comes with many nuances and details that cannot be ignored. First, let’s explore some of the features of online commercial energy rate offers:
Sort Multiple Supplier Offers
Online shopping platforms allow customers to easily see rate offers from multiple suppliers in a single screen. Structured similarly to e-commerce websites, these online portals allow you to filter rates by contract term length, supplier, green energy attributes, early termination fees, and more. Shopping for energy online is quickly becoming the wave of the future in deregulated territories.
Review Contract Terms & Conditions
Another nice feature of online energy shopping sites is the ability to read and review the supplier’s contract terms without having to request a contract. Most sites require suppliers to post a link to their terms and conditions where customers can read about energy pass through charges, capacity and transmission costs, material change language, and energy bandwidth clauses. This makes reviewing supplier contracts simple and easy.
Enroll Your Account Online
Finally, when you are ready to choose an offer, you can simply select the rate plan, enter your account and billing information, and request a new enrollment directly online. This makes signing up for a new energy supplier fast and eliminates any back-and-forth emailing, or having to print, sign, and scan an energy contract.
Challenges For Commercial Customers
While shopping for energy online can be convenient, it presents many challenges for commercial customers. Some of these obstacles include:
Fixed Rates Only
Online commercial rate offers are for fully-bundled fixed rates only. If you are a larger commercial customer with unique needs, these plans might not be your best choice. Customers with high peak demand in off-peak periods, or fluctuating demand might benefit from a hybrid energy product, such as a block + index contract. These types of supplier contracts can only be negotiated by an experienced energy broker or consultant.
Load Restrictions
Most commercial offers online are for small commercial customers only. They typically limit enrollment to customers with peak demand less than 50 kW, and can even reject a contract enrollment based on a customer’s load factor rating. This can create problems when you think you signed up for an attractive offer, only to realize days later that the supplier rejected your energy account enrollment. Furthermore, if you need to meet a utility enrollment date in order to renew your contract on time, you could get stuck paying a post-term, variable rate with your current supplier.
Limited Supplier Options
Not all energy suppliers market their rates on the internet. This limits the customers’ ability to truly search the market for the lowest rates. Oftentimes, the lowest-priced energy suppliers exclusively work with retail energy brokers to market their product offerings.
Teaser Rates
Many commercial energy offers online are teaser rates designed to attract new enrollments, with the intention to raise the rates at a later date. Beware of surprisingly low offers that are for short terms (less than 6 months). These energy suppliers are betting on your negligence and will increase rates if you forget to renew your contract. Furthermore, these teaser rates are only available to new customers, which prevents commercial accounts from choosing a low offer every couple of months from the same supplier.
Limited Contract Negotiation
Shopping for energy online limits your ability to negotiate with the energy supplier for favorable contract terms. Online rate plans are “as is” and the customer is required to abide by the supplier’s standard terms and conditions. This could cause unexpected price increases, leading to higher energy costs. It’s best to seek the guidance of an energy professional when negotiating and reviewing contract terms.
Immediate Start Dates Only
Online offers are only available for immediate start dates on the customer’s next meter read cycle. This limits customers from taking advantage of low futures market pricing by post-dating the start of an energy contract. On the flip side, when working with a broker, he can negotiate a future-dated contract that can begin up to 36 months in advance. By taking advantage of the energy forward markets, brokers can help their customers save significantly on energy costs when market conditions change.
Lack Of Ongoing Support
Finally, signing up directly with a supplier online eliminates the role of an energy broker or consultant who is often your tier-one level of support. It requires you to communicate directly with the supplier’s customer service department, which often does snot provide personalized support.
Advantages Of Using An Energy Broker
There are many advantages for commercial and industrial customers when working with an energy broker to negotiate the purchase of electricity and natural gas. Let’s explore some of the benefits of working with a broker compared to shopping online for energy.
Cost Forecasting
Energy brokers can help you evaluate multiple rate plan structures (fixed, index, fixed + index) and create cost forecasting models to display the benefits and risks. This can be quite valuable for larger companies who are looking for custom energy pricing that suits their load profile.
Complex Deal Structures
Brokers have access to all sorts of price structures from their supplier partners. This includes negotiating hybrid energy supply products such as load-following block + index, traditional block + index, fixed adder index products, fully-bundled fixed rates, and fixed rates with passthrough adjustments. These complex energy deal structures are not available to customers shopping online.
Special Supplier Terms
Another key aspect of working with an energy broker is negotiating custom supplier contract terms that are suitable for your business and its energy needs. For example, bandwidth usage allotments can be lowered for customers with consistent and predictable energy consumption patterns. Lower bandwidth requirements come with better prices as the supplier assumes less risk. These custom terms are not available in standard online rate plans.
Ongoing Support
Finally, one of the biggest advantages of working with an energy broker is the ongoing support and service provided by the broker. Energy brokers will monitor your energy consumption, contract expiration dates, and watch the energy futures market on your behalf to execute renewable contracts at the right time. These services are invaluable for energy customers and are not provided by suppliers directly.
Interested In Working With An Experienced Energy Brokerage Firm?
If you have been purchasing energy only and are ready for a more customized solution, you’ve come to the right place. Diversegy and its team of energy market experts have over 100 years of combined experience navigating complex energy markets and negotiating custom contract terms for its customers. Contact us today for a free evaluation to see how much you could save.
