Broker or Direct? How Texas Businesses Actually Buy Electricity
A Texas commercial electricity broker submits your usage to multiple ERCOT-registered suppliers and returns competitive bids at no direct cost, the winning supplier pays the broker's commission out of its own margin. Going direct means working off one supplier's quote. Competitive bidding through a broker usually produces sharper pricing than a single offer.
Say a Houston warehouse uses 42,000 kWh a month and its direct supply quote charges 10.2¢/kWh: that's $4,284 a month in energy charges. Put that same load out to five competing suppliers instead of taking the first offer, and a winning bid at 8.1¢ drops that to $3,402 a month, a difference of $882 a month, or $10,584 a year. Example numbers to show the math, not a live quote. The business didn't change a single light bulb. It just made suppliers compete for the account instead of pricing it alone.
What a Commercial Electricity Broker Actually Does
A commercial broker takes your usage history, your rate class, and your ESI ID, and puts it in front of a panel of ERCOT-registered retail suppliers at the same time. The broker never touches delivery. Oncor, CenterPoint, AEP Texas, and TNMP still run the wires and handle outages no matter who supplies your energy. What the broker negotiates is the supply-only contract: the per-kWh rate, the contract term, and how demand charges are structured on the invoice.
That last part deserves as much attention as the headline energy rate. Commercial bills carry demand charges billed on the highest 15-minute kW interval of the cycle, on top of straight energy usage. A good broker structures the contract around that, not just around the headline energy rate.
How Brokers Get Paid, and Why It Costs You Nothing
Here's how broker commission works. The broker's commission is paid by the winning supplier, out of the fractional per-kWh margin that supplier already builds into any commercial contract, whether it comes through a broker or straight off a sales rep's desk. That margin exists either way. The only question is whether one supplier sets it in a vacuum, or five suppliers set it while trying to beat each other.
We recommend asking any broker to disclose exactly how that commission is structured before you sign an agency letter. A broker who won't answer that question directly, or who gets vague about which supplier is paying them what, is not someone you want representing your account.
Why Competitive Bids Tend to Beat a Single Direct Quote
Texas commercial electricity averaged 8.66¢/kWh all-in against a US commercial average of 14.19¢/kWh all-in (EIA, 06/2026). That's the delivered rate, supply plus wires plus fees, not a supplier's supply-only quote, so don't hold a broker's bid sheet up against that number directly. What it tells you is that Texas commercial pricing runs meaningfully below the rest of the country because ERCOT's competitive market forces suppliers to fight for load. A single direct quote skips that fight entirely.
When one REP's commercial sales rep quotes your account, they're pricing it against their own margin target for that week. They have no idea what a competitor would offer, and neither do you. When a broker submits the same load simultaneously to a panel of suppliers, each supplier knows the load is being bid competitively and prices accordingly. That dynamic tends to sharpen the number, especially on accounts above roughly 50,000 kWh a month (our estimate, not a published statistic), where index and block-and-index pricing structures open up and suppliers compete harder for the volume.
- Are you PUCT-registered as a commercial broker, and what's your registration number?
- How many suppliers will you actually put my usage in front of, not just the one you're recommending?
- What's your commission structure, and which supplier is paying it on this contract?
- Will you show me the losing bids in writing, not just the one you picked?
- Can you bundle multiple ESI IDs or locations into a single competitive bid?
- Who monitors my renewal date, and how far out do you start shopping it?
A common trap isn't a bad rate, it's an evergreen broker-of-record letter. Some agreements let a broker represent your account indefinitely and only show you the offer they picked, never the ones they turned down. Before you sign anything, ask to see the full bid matrix in writing. If a broker refuses, that's your answer.
When a Direct Quote Is Good Enough
If your business sits on a municipal or co-op utility, a broker can't shop that account at all. Austin Energy, CPS Energy, Garland Power & Light, Denton Municipal Electric, and New Braunfels Utilities all run fixed commercial tariffs with no retail choice. A business on one of those systems buys direct because there's no other option for that meter. That said, a company with locations in both a municipal city and a deregulated ERCOT city, say a headquarters in San Antonio and a second location in Houston, can and should shop the Houston account competitively even though the San Antonio account is stuck on CPS Energy's tariff.
Outside of municipal territory, we still recommend getting a broker bid before signing anything direct, even for a small account. It's free to check, the supplier you choose pays our commission, and the comparison alone tells you whether the direct offer you have in hand is actually competitive or just convenient.
- You operate more than one location across different TDU territories (Oncor, CenterPoint, AEP Texas, TNMP)
- Your usage runs above roughly 50,000 kWh a month (our estimate, not a published statistic), where index and block pricing become real options
- Your contract renews within the next 60 to 90 days
- A past contract rolled over to a month-to-month variable rate because nobody caught the renewal window
- Demand charges are consuming a meaningful part of your monthly bill (our estimate, not a published statistic) and nobody's structured the contract around them
Start the shopping process 60 to 90 days before your current contract ends, not the week it expires. Suppliers price renewal accounts more aggressively when they know you have real time to compare, and a rushed renewal almost always defaults to a worse rate or a variable month-to-month plan.
Get a broker to bid your commercial account against multiple ERCOT suppliers, at no cost to you: the supplier you choose pays our commission.
Get My QuoteFrequently asked questions
No. A legitimate commercial broker is paid a commission by the winning supplier, built into the per-kWh rate the supplier already planned to charge. You don't write the broker a check and you don't see a separate broker fee line on your bill.
Not guaranteed in every case, but running your load past several suppliers at once instead of accepting one company's opening offer usually produces a sharper number, because suppliers know they're competing and don't know what the others quoted.
Only if you're in deregulated ERCOT territory served by a shoppable TDU like Oncor, CenterPoint, AEP Texas, or TNMP. Businesses on municipal or co-op utilities such as Austin Energy, CPS Energy, Garland Power & Light, or Denton Municipal Electric buy on that utility's fixed commercial tariff and can't shop a broker for that account.
For most commercial accounts, a broker should be sending your usage profile to several ERCOT-registered retail suppliers at the same time (our estimate, not a published statistic). Sending it to only one supplier isn't really testing the market, it's just getting a second opinion.
Yes. Texas requires commercial electricity brokers to hold a PUCT registration. Ask any broker for their registration number before handing over a bill or signing an agency letter, and confirm it's active on the PUCT's own site.