Houston Has Quite A Few Energy Brokers
Houston has hundreds of energy brokers that have opened up business after deregulation in 2002. Reliant Energy and TXU Energy had their companies split into two seperate entities. They were broke up by the Texas government into the pole and wires entity and the Retail Electric Provider entity. What once was a monopoly that handled both the energy marketing and selling and the maintenance and infrastructure of the pole and wires now are two seperate companies. In fact, these two entities are not related to one another any longer and if they were to provide special consideration with each other it would be considered illegal. There actually is no longer any type of incentive if they were to provide special considerations to each other. Many of the TXU employees as well as Reliant Energy employees have left to start up their own energy consulting companies and brokerages.
What is an Energy Broker?
An energy broker is someone who had some type of training in the Texas Electric market prior to deregulation or was trained by someone who had this type of training. Many of them are previous employees of TXU and Reliant Energy. There are quite a few that used to work for Enron. These brokers offer different services but typically they provide a service that compares several different energy rates with each other. They work to reduce the electric rate over a few days period as the energy providers compete with each other. As the rates come in the energy brokers ask for more competitive bids if the rates do not compare well with one another. In the process the rates come down and the energy provider considers the volume of business the energy brokers provide to them on a monthly basis. If it is worth bidding low to win the business an energy broker is able to bring to them then they will come down to a point that is competitive enough to win the bid. The Electric Company must decide how low they will go and this process often times will bring the rate lower then what a Texas company could achieve for themselves if they were to go through the same negotiation process.