Energy Supplier vs. Consultant…What’s the Difference?

The vocabulary used to reference individuals who provide services in the energy industry many times can be confused with one another.  The terms energy broker, energy consultant and energy management company many times are used interchangeably and can sometimes be misinterpreted as the entity that supplies the energy. However, typically this company is responsible for assisting clients in acquiring electric or natural gas rates from energy suppliers and managing the client’s strategy for procurement. In states where energy is deregulated, consumers have the power to choose what company will be their supply source, and ultimately who they will have assist them with this change.

A supplier is a company that buys the gas or electric commodity in large quantities and then sells it to customers. There are certain requirements that a company must meet to be considered an energy supplier, which include:

• Obtaining a supplier license through the PSC (Public Service Commission) as well as consenting to financial and integrity reviews
• Securing an agreement with the ISO (Independent System Operator) or RTO (Regional Transmission Organization) in their geographic area which allows the supplier to buy and sell electricity
• Meeting credit and other obligations with the local gas or electric utility company in order to receive approval to transport electricity through the wires or gas within the pipes
• Proof through a title process that they have the means to obtain the electricity or gas supply they will be selling
• Providing customers with legal contracts for the sale of the electricity or gas
• Offering dispute resolution resources for customers as well as state agencies for when a complaint arises

In contrast, energy consultants like Power Management, do not have any ownership in the actual commodity or the ability to sell or distribute energy. The role of a consultant is to maintain working relationships with suppliers which allow them to obtain a variety of competitive quotes they can present to their clients. Consultants work as a middleman between the customer and supplier with the goal being to ensure the customer understands their choices, and gets fair and competitive rates.  Not having a stake in the actual commodity guarantees the consultant is not committed to any one utility or supplier. This allows for an independent and unbiased opinion about what supply option the customer chooses.

Many suppliers will offer lower rates to consultants as compared to a customer directly because they know they have to compete for the business, as the consultant is getting multiple quotes for their client. Consultants also help to provide an apples to apples price comparison to ensure all price components are included and transparent in order to present the best options that will meet their client’s needs overtime.

Although price is a very important piece to the puzzle, there are many components to managing your energy that are vital to a successful, well rounded plan.  Most suppliers are only interested in providing customer with the supply price of the commodity which is their core business and what they make their money on. They simply don’t have the staff or expertise to provide “value added” services. Conversely, consultants typically offer additional services such as market forecasting, utility bill analysis, conservation tips, sustainability expertise and more. A consultant works to establish a comprehensive energy strategy to not only obtain a great price, but keep your overall contract terms and risk avoidance goals in mind for the long run. For example, here at Power Management, each client is assigned an account manager that is their direct point of contact for any and all questions or concerns. We are the first person you can call whether it’s an issue with the supplier or utility. We monitor energy trends and price movements daily. We are always willing to perform billing reviews to ensure accuracy if you feel there is any discrepancy.

With the influx of new companies in the industry it’s important to keep in mind that all companies do not operate in the same way. Whether you choose to work directly through a supplier or with a broker, consultant, or energy management company, you should know up front what types of services they will provide you and your company. It is imperative to have a solid understanding of the company’s scope of services and their knowledge of the market before allowing them to manage your energy.