Archive for Energy Brokers
Electric Rates follow Natural Gas Higher
Posted by: | Comments
As a barrel of oil hit $100 we saw natural gas prices spike to nearly $8 mmbtu but they have dropped 2 %Â today in hopes that they will come back down to where they have been. Electric rates in Texas were dramatically effected by the spike in natural gas and we saw rates bounce once again off of a consistent support level. For those commercial businesses who might have been waiting to sign a term energy contract they have seen any potential of getting in at the bottom eaten up by this volatility in the market. The best solution at this point is get in on some type of contract before risking the potential of the market rising any higher.
It isn’t always easy to follow the market and decide when would be the best time to get in but that is why there are hedged fixed term energy contracts. Each contract is made based upon where the market has justified that price to be based on simple supply and demand. If you compare a few offers on the same term from multiple Texas Retail Electric Providers then you are close to finding a good electric rate for your company. Rates are still pretty low right now and so the time is well to go ahead and make a decision. You can always try again next year when your energy contract expires. If your facility uses a lot of energy you might want to consider a blend with MCPE. This will reduce your rate by 1 1/2 to 2 pennys a kWh and save you some additional money. An Texas energy consultant can explain more about how this is done and what the potential risks are involved.
Houston Energy Brokers
Posted by: | Comments
Houston Has Quite A Few Energy Brokers
Houston has hundreds of energy brokers that have opened up business after deregulation in 2002. Reliant Energy and TXU Energy had their companies split into two seperate entities. They were broke up by the Texas government into the pole and wires entity and the Retail Electric Provider entity. What once was a monopoly that handled both the energy marketing and selling and the maintenance and infrastructure of the pole and wires now are two seperate companies. In fact, these two entities are not related to one another any longer and if they were to provide special consideration with each other it would be considered illegal. There actually is no longer any type of incentive if they were to provide special considerations to each other. Many of the TXU employees as well as Reliant Energy employees have left to start up their own energy consulting companies and brokerages.
What is an Energy Broker?
An energy broker is someone who had some type of training in the Texas Electric market prior to deregulation or was trained by someone who had this type of training. Many of them are previous employees of TXU and Reliant Energy. There are quite a few that used to work for Enron. These brokers offer different services but typically they provide a service that compares several different energy rates with each other. They work to reduce the electric rate over a few days period as the energy providers compete with each other. As the rates come in the energy brokers ask for more competitive bids if the rates do not compare well with one another. In the process the rates come down and the energy provider considers the volume of business the energy brokers provide to them on a monthly basis. If it is worth bidding low to win the business an energy broker is able to bring to them then they will come down to a point that is competitive enough to win the bid. The Electric Company must decide how low they will go and this process often times will bring the rate lower then what a Texas company could achieve for themselves if they were to go through the same negotiation process.
Reverse Auction Sends Electric Rates Down In Texas
Posted by: | CommentsElectricity Rates Come Down With Reverse Auction
Commercial companies are always in need to reduce their electric rate because of the direct ability to bring needed savings to the bottom line. Being able to negotiate an electric rate below the companies budgeted goal can justify a manager’s position in a company. A large facility could stand to save tens of thousands of dollars if a reverse auction is used.
Click Here to Learn more and Begin the Reverse Auction Process
How Does A Reverse Auction Work?
Reverse Auctions work in the business to business working relationship. One business would like to win the business of another and so they bid on the work. The company needing business done receives bids from several different companies who offer the same service. During the bidding process the companies placing bids understand they need to price as competitively as possible in order to win the business. The company needing the service picks the lowest bid and ends up with a lower price for the service than if they were to just take the first sales pitch that came along. Many times in the case of an electricity broker you will have the reverse auction facilitated by an energy broker. The energy broker brings a large volume of business to the electric providers in the reverse auction. The Retail providers understand that if they don’t price with the best possible terms and conditions along with a low electric price they will not win the companies business. The energy broker understands what is legally written in the contracts and what is favored towards their client rather than towards the Retail Electric Provider. Many times the energy broker will step in and make the energy contract more agreeable to the customer if the energy company tries to sneak in an unfavorable clause in the energy contract.
Texas Electric Companies
There are more Retail Electric Providers in Texas then in any other state. Texas represents the most competitive energy market in the United States of America. Many energy companies came from out of state to start up in Texas when the state deregulated the electric market. The energy grid is split up into 5 different regions but the state plans to break it up into several more nodes (nodal system) in 2008. The reason for the break up is to assist in alleviating the congestion zones. Many smaller outlying cities around the metropolises have to pay high electric rates only because they are a part of the bottleneck caused by Houston, Dallas, and other large cities in Texas. Having several nodes to break up the congestion will allow those cities causing the congestion bottlenecks to pay for their problem and give them incentive to create a more robust infrastructure to handle the demand. A reverse auction can assist commercial businesses in some of the metropolitan areas like Houston Texas by filtering through some of the hype about this congestion to the lowest bottom line rate that a Retail Electric Provider can offer. Some providers will justify their high energy rate because of the commercial business being in a highly congested area. This may be a smoke screen to a dishonest sales tactic. A reverse auction filters these bids out of the mix.
New Ways To Save On Electricity In Texas
The Texas ERCOT grid has some new ways to save for the Houston area. Smart metering is being used on a small scale in the Centerpoint area. Centerpoint is the poles and wires company in Houston. This company reads the meters in the metropolises, installs the poles and wires, transformers, and electric infrastructure. Smart metering keeps track of peak demand and can turn off your air conditioner and back on if your company is about to go over a demand level that could be costly to the bottom line. This is a win win situation as Centerpoint does not have to build additional power plants to keep up with increased demand. An energy broker can assist in enrolling a commercial business in some of these new ways of saving money on a businesses electricity bill.
Electricity Brokers Mean Dollar Savings
In summary, an electricity broker can save a company thousands of dollars. Texas Electric Providers market but energy brokers find the cheapest rate. The difference in going directly to the provider and working with a broker translates into a more informed buying decision and more money to the bottom line. You may click the link below to fill out a short form to begin the reverse auction process for your Texas commercial or industrial business.
Begin Your Texas Commercial Electricity Reverse Auction