questions you must ask your energy broker

The questions you MUST ask your energy broker…

These are the questions you MUST ask your energy broker…and please do ask these very same questions of IU Energy. We are happy to answer all of them, now, on 01752 26 26 26 or

Q. Are you completely independent? Are you giving me the best market rates?

A. Only an independent broker will show you ALL the pricing options. If the broker quoting you is not independent and has affiliations with suppliers, you will only be shown those they want you to see, and they almost certainly won’t be the best deals on the market.

Q. How long have you been in business?

A. Crucial, because the market is inundated with companies that come and go and as energy contracts last quite a while, it’s important you’re aligned with a reputable broker. When a broker disappears, you’re left to pick up the pieces and this can be a time consuming and costly nightmare.

Q. Have you any independent testimonials?

A. Not all brokers have genuine client testimonials – you know, the ones where you can verify they’re given by real clients and are true endorsements. Press this with any broker – ask to see testimonials and ask to speak to the people who gave them. There’s nothing more telling than historical clients. As a general matter of course, ask for everything that’s discussed to be sent in writing.

Q. Can you guarantee me an Account Manager who knows my account?

A. Needless to say, with IU Energy you have a dedicated account manager, but what if the answer is ‘No’? It’s fine if you don’t mind repeating yourself every time you call, or explaining that your business has special requirements on every anniversary of your contract. If you’re busy, which as a business person you are, isn’t it better to have someone who’s anticipated your questions and who has an understanding of your unique needs? That way you’ll only ever get the right deal – you don’t want to be someone’s experiment because you’re the only person who’ll pay for it.

Q. Is this a fully fixed offer? Are there pass through charges I’m not being shown?

A. For example, standing charges above. There are many more pitfalls you may not be told about however. Here are just a few and illustrates why this is one of the key questions you must ask your energy broker –

DUoS (Distribution Use of System Charges)

Availability Charge (Supply Capacity KVa). Charge for the power capacity held available for a supply point. Charged in £/kVa/day whether you use it or not.

Excess Availability Charge. An excess kVa availability capacity charge when the agreed monthly demand is breached. There may also be other liability risks associated with breech of agreed supply capacity. These will be outlined in your supply agreement, but you need to be aware of this fine print.

Unit Rates (time of use surcharge). In a move to encourage industrial and business consumers to reduce their electrical load at peak demand times, OFGEM approved a tariff based surcharge to penalise those consumers who use power at the ‘wrong’ time of the day. Each meter point now has a specific RED, AMBER and GREEN timed based tariff band effective every weekday throughout the year. For every KWh consumed within the Red band, you may see your KWh overall cost more than double.

Reactive Power Charge (KVar). Covers the extra power drawn from the network as reactive power (electricity that is used but not transformed and will eventually return to the distribution network) Apart from its need to energise magnetic fields associated with motors and transformers, reactive power is useless and unwanted. You are permitted an element for free (for energising duties) but you incur KVar charges above that. It also uses up supply capacity that you are paying for.

BSUoS (Balancing Services Use of System Charges). Recovers the cost of balancing the National Grid transmission system each half hour (ensuring that supply and demand match). Customer’s charge is based on their proportion of BM Unit Metered Volume for each Settlement Period relative to the total BM Unit Metered Volume for each Settlement Period, adjusted for transmission losses.

Meter reading, Data Collector (DC), Data Aggregator (DA). Managing your electricity supply charges and supply agreement, these services can be contracted directly between the end user and the service provider. Where no direct agreement is in place, your supplier will appoint their default provider and monthly service charges will appear on your billing.

All the above should now be identified independently on half-hourly metered supply billing. However, those smaller supplies at non-half-hourly metering may not have this level of visibility available and it can hurt you if you’re an SME who’s not been kept in the picture by a hungry broker.

Q. Does this quote include standing charges?

A. Standing charges are added to your bill daily or monthly and are not included in your quoted kWh rate. If the quote you have received does not show you these, you are not being given the full picture and your bills will be higher than you were led to expect. If these are missing, it’s an easy indicator that you aren’t comparing like for like quotes.

 Q. What do you do to prevent rollover?

A. Will your broker automatically schedule reviews weeks or months ahead of your renewal date to ensure your contract doesn’t lapse and drop you into your existing supplier’s expensive standard rate? If you’re a big user, this could cost you thousands of pounds before you realise what’s happened. Guess who benefits from that? It certainly isn’t you…

 Q. How often do you review and report on the market?

A. Many brokers operate a ‘fire and forget’ policy. Their interest is in closing you and that interest wanes immediately afterwards. They have no interest in what’s happening in the market or in warning you of trends you need to think about – or telling you good news for that matter. Always try and pick someone who can discuss the big picture with you, because it will filter down to make big differences to your own approach to energy. Here’s a couple of great examples that we made sure our clients knew about – DCP161 and P272

 Q. How can I reduce my energy consumption?

This one’s a beauty and is definitely one of those testing questions you must ask your energy broker, because most of them have zero interest in driving your demand down. That’s partly because it affects their commission and partly because they don’t know or care. All businesses are going to be hit by the UK’s energy security over the next decade and the cost of energy and reliability of supply will be disruptive and even fatal to some businesses.

The smart business money is going into sustainable and efficient technologies to reduce or even eradicate demand from the grid – this will even out power outages and reduce your indirect costs. There are also numerous financial and tax schemes available from Government which have and will continue to have a huge positive impact on businesses and the environment. Government knows this is coming, and that’s why there are a bewildering number of incentives to businesses to reduce grid consumption.

If your broker isn’t interested, find one who is – one who is also certified, capable and who has a demonstrable track record of delivering an ROI on energy efficient technologies. And yes, you’re welcome to ask IU Energy the questions you must ask your energy broker.

You can download this guide here – Henry.

Talk to us now about your own business energy challenges on 01752 26 26 26 or email

And please ask us the questions you MUST ask your energy broker…