A utility broker or energy broker guides industrial customers, infrastructure companies, and household owners to purchase and sell energy services and products. It calls for extensive market know-how and experience in energy procurement to provide the necessary assistance.
What does an energy broker do?
Energy brokers assist clients in procuring electric or natural gas from energy wholesalers/suppliers. Energy brokers save their customers money by negotiating contracts between energy consumers and energy suppliers. Usually, energy brokers work as consultants and advise on a wide range of considerations, from choosing the most effective contracts to compliance 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 with the energy business, contractual terms of different energy suppliers, and markets’ pricing structures. An Energy Broker’s salary is between $49000 – $75000, depending on seniority levels. Energy Brokers can get an average salary 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 plan to serve
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Go through the detailed job responsibilities, educational criteria, and career prospects of being a utility broker:
Job Responsibilities
A utility broker’s major task is to negotiate the pricing and agreement terms of energy sale and purchase. Firstly, he contacts some energy suppliers and examines their prices. Thereon, he sells or buys requisite energy products or services on behalf of the household and commercial customers.
While the above-mentioned tasks form the main part of an energy broker’s job, he carries out some other duties. These include collecting data and information related to the energy supply market, search for suitable energy contracts at 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 deal with customer relationship management. This entails proficiency in basic technical knowledge and abilities.
Educational Criteria and Qualifications
To pursue a utility broker’s profession, you must get a bachelor’s degree in finance, economics, marketing, or equivalent field. The aspiring brokers are expected to have some market experience. This kind of experience is important to find good work. Also, they 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, national energy retail market, relevant client-approaching opportunities, and their adherence to industry standards.
EMP certification can be obtained by all TEPA brokers, aggregators, suppliers, and consultants. All they have to do is appear for an online test comprising of 60 MCQ (multiple choice questions). This test can be given remotely and at a time suitable for the applicant.
Brokers are essentially a type of consultant who lends advice to their clients regarding the appropriate services and products available in the market. You can opt for more than one kind of employment to work as a broker. For instance, some run their one-person business while others work in full-fledged organizations. Simply put, you can work independently or in a partnership.
Brokers specifically pay attention to customer requirements and maintain great relationships with current and potential clients. Apart from acquiring energy-linked knowledge, these brokers’ additional duties revolve around predicting demands, creating energy product or service packages, and offering guidance.
Besides utilities, brokers can work as sales representatives in various industries, irrespective of whether they are energy-related or not.
Salary Prospects
Though there is no accurately verified data for the position of ‘energy broker’ as a particular profession, the BLS (Bureau of Labor Statistics) of the US gathers data on commodities, securities, and similar financial services’ sales representatives who mediate between sellers and buyers in business markets. As per 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 rest half were paid lower than this.
Scope of Career Growth
While the BLS doesn’t provide the precise career growth statistics of utility brokers, it does report a growth rate of 6% (2016-2026) for the 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
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