How Does An Energy Broker Get Paid?

What Makes Us Different

Every energy broker and/or energy procurement firm gets paid differently. Some energy brokering companies that have owner representative agreements in place might charge a fee. Whether this is an upfront fee or a fee based on performance savings, some energy companies are compensated by the commercial client, directly. Hence, if you’re a commercial business looking for an energy broker, this is an important question to ask, so you 100% know what costs are associated with the energy broker and their energy procurement services. 

Most energy brokering companies do not charge a fee to the commercial customer directly. They  have contracts in place with one or several energy companies and these energy brokers are paid directly by the retail energy companies. Some examples of popular retail energy companies (aka: Retail energy suppliers/ providers) you might have heard of are: Direct Energy, Constellation Energy, Dynegy, TXU Energy, Hudson Energy, IGS Energy, Tara Energy, Eligo Energy, Nordic Energy, AEP Energy, Gas South, EDF, Engie, MidAmerican Energy, and many more. If you own a business within a deregulated electricity market, procuring your energy with a third-party energy supplier, through an energy broker (like Ananta Energy Source,) your commercial business would pay your electric bill through your regular utility provider. Once your local utility company receives your payment, that utility company would then pay the supplier, and then the supplier pays the broker (us!).

Markets Can Vary

Specific deregulated electricity markets like Texas  do not have a utility consolidated bill (UCB). This market is dependent on third-party retail energy providers to handle the billing. This scenario is known as Supplier Consolidated billing, as the supplier issues the bill and this bill is inclusive of all supply charges as well as distribution charges + taxes. 

Regardless of the billing option, most energy brokers are paid by  third-party retail energy providers, as soon as they’re paid by the client. 

Our Transparent Business Model

For 99% of our clients at Ananta Energy Source, we do not charge any upfront fee or a performance-based fee.  We have our fees included in the supplier's rate. Does Ananta Energy Source work for free? No. Do Ananta Energy Customers pay us for our services? Yes, they do pay us, but never directly. Ananta clients simply pay their electric bills, and when the respective supplier receives their supply portion, that supplier then pays us our portion. What’s unique about our Ananta is that our fees are disclosed in our RFP (Request For Your Proposal), and our fees are the same across the board with suppliers when shopping. What does that mean? When we shop our pricing between companies like Direct Energy, Constellation Energy, and Dynegy to name a few, we keep our margin exactly the same between all of these companies to ensure that our customers receive zero bias from their energy broker. Ananta fees have been as low as $0.0001/kWh, and as high as $0.007/kWh depending on the customer, size, and energy product type. Our average margin across our entire portfolio of 900+ commercial customers is around  $0.002/kWh. 

The End Result

To conclude, some energy brokers get paid upfront by their customer and are paid a predetermined fee for the procurement services. Essentially, these energy brokers are paid directly just to shop around for energy rates from a variety of energy suppliers. Most energy brokers, including Ananta, DO NOT charge a fee upfront, but rather include their fee into the rates being provided. Depending on which energy provider wins the energy contract, that energy provider would then pay Ananta once the agreement has been booked and the energy contract has been started. 

For more questions on how Ananta is paid, and/or how energy brokers are paid in the industry, please feel free to reach out to us. Building a portfolio, or a book of commercial energy accounts can be compared to a real estate landlord who has multiple tenants to manage every month and multiple rent checks to collect every month. The major difference here is that instead of collecting a monthly rent check, an energy broker receives fractions of a penny on their customer’s utility bills.