A utility broker or energy broker guides industrial customers, infrastructure companies, and household owners through the purchase and sale of energy services and products. To provide the necessary assistance, a utility broker or energy broker requires extensive market know-how and experience in energy procurement.
What does an energy broker do?
Energy brokers assist clients in procuring electric or natural gas from energy wholesalers/suppliers. They save their customers money by negotiating contracts between energy consumers and suppliers. Usually, energy brokers work as consultants and advise on a wide range of considerations, from choosing the most effective contracts to complying with key regulatory and administrative requirements.
Now, let us see how we can start a business as an energy broker.
How to be an energy broker?
If you have good interpersonal, technical, and analytical abilities, you can make a lucrative career as a utility broker. A utility broker needs to be well-versed in the energy business, contractual terms of different suppliers, and markets’ prices. An Energy Broker’s salary is between $49000 – $75000, depending on seniority levels. Energy Brokers can get an average wage in the US of 6500 dollars every year. Energy Brokers are compensated the highest in Massachusetts, where they earn an average salary rate of close to $7500.
Before starting the registration process, Utility Brokers need to make sure that the business entity is in good standing and, if providing service outside of the home state, has a certificate of authority to do business in each of the jurisdictions where the company plans to serve
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Go through the detailed job responsibilities, educational criteria, and career prospects of being a utility broker:
Job Resbroker’sities
A utility broker’s major task is to negotiate the pricing and agreement terms of energy sales and purchases. First, he contacts some energy suppliers and examines their prices. Then, he sells or buys the requisite energy products or services on behalf of household and commercial customers.
While the tasks mentioned above form the broker’s role as an energy broker, he also carries out some other duties. These include collecting data and information related to the energy supply market, searching for suitable energy contracts in the market, giving recommendations, and overseeing multi-site agreements.
Utility brokers utilize their well-honed interpersonal skills in managing clients and creating and delivering sales proposals or presentations. Further, they are required to use specialized software and applications to manage customer relationships. This entails proficiency in basic technical knowledge and abilities.
Educational Criteria and Qualifications: A utility broker probation officer must get a bachelor’s degree in finance, economics, marketing, or an equivalent field. The aspiring brokers are expected to have some market experience, which is essential for finding suitable work. They also need to have established relationships with energy suppliers.
Further, you may have to secure a broker license from a professional body like TEPA (The Energy Professionals Association). This organization provides a certification called EMP (Energy Management Professional) to the people who wish to present their industry knowledge to prospective clients. With the certification, such brokers can verify their awareness of industry news and related data, the national energy retail market, relevant client-approaching opportunities, and adherence to industry standards.
EMP certification can be obtained by all TEPA brokers, aggregators, suppliers, and consultants. All they must do is appear for an online test comprising 60 MCQs (multiple choice questions). This test can be given remotely and at a time suitable for the applicant.
Brokers are essentially consultants who advise their clients regarding the appropriate services and products available in the market. You can choose to work as a broker in more than one capacity. Some run their one-person businesses, while others work in full-fledged organizations. However, you can also work independently or in a partnership.
Brokers pay attention to customer requirements and maintain great relationships with current and potential clients. Apart from acquiring energy brokers’ knowledge, these brokers’ additional duties revolve around predicting demands, creating energy products or service packages, and offering guidance.
In addition to utilities, brokers can work as sales representatives in various industries, regardless of whether they are energy-related.
Salary Prospects
Though there is no accurately verified definition for the position of ‘energy broker’ as a particular profession, the BLS (Bureau of Labor Statistics) of the US gathers data on commodities, services, and financial services sales representatives who mediate between sellers and buyers in business markets. According to the BLS, the average annual salary of these workers in 2018 was $64,120. In other words, half of this workforce earned above this amount while the other half were paid lower than this.
Scope of Caredoesn’tth
While the BLS doesn’t provide precise career growth statistics for utility brokers, it does report a growth rate of 6% (2016-2026) for workers in commodities, securities, and other financial service sectors. This is slightly less than the national average growth rate of all professions, estimated to be 7%.
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Nimblefreelancer.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@nimblefreelancer.com
