In Texas's deregulated commercial electricity market, any licensed broker can run a reverse auction for your account. The PUCT license (like our BR260054) establishes baseline legitimacy. But the license doesn't tell you whether the broker understands your load profile, presents total delivered cost or just supply rates, discloses their compensation structure, or has experience with accounts of your size and industry.
Choosing the wrong broker in Texas doesn't mean paying more for the broker's service — the broker's fee comes from the winning provider at the same level regardless. It means potentially accepting a contract that looks like the best rate but produces a higher total bill, missing demand charge optimization that could save more than the supply rate improvement, or signing an auto-renewal clause that erases two years of savings in months 25 and 26.
This guide covers the specific criteria that separate brokers who produce genuinely competitive outcomes from those who don't, with a focus on what to ask before authorizing a broker to run your auction.
Every commercial energy broker operating in Texas must be licensed by the Public Utility Commission of Texas. The PUCT license number should be visible on the broker's website, in their communications, and in their contracts. You can verify any broker's license status directly at puc.texas.gov.
Beyond licensure, PUCT rules require brokers to disclose how they are compensated. A broker who refuses to disclose their compensation structure, claims they charge the business directly, or whose compensation explanation is vague or contradictory is a red flag. In the standard Texas broker model, the broker earns a commission from the winning REP — a per-kWh fee built into the supply rate that is the same whether you use a broker or contact the provider directly. You pay the same total amount either way. This should be stated clearly and in writing.
Unlicensed or non-disclosing brokers occasionally operate in Texas by presenting themselves as consultants, energy advisors, or procurement specialists. If a firm soliciting your electricity business can't produce a PUCT broker license number on request, don't authorize them to act on your account.
The value of a reverse auction is proportional to the number of genuinely competitive bids it produces. A broker with access to 25+ licensed Texas REPs produces materially more competition than a broker who works with 5 or 6 preferred providers. The competitive pressure that drives rates down requires a sufficient number of bidders who are genuinely competing rather than a small pool coordinating informally.
When evaluating a broker, ask specifically: how many providers will receive your account for bidding, and will you see every bid or only the broker's recommended selection? The answer should be all bids presented transparently. A broker who pre-filters bids or presents only their top three recommendations is limiting your visibility into the competitive market for your account.
Also ask whether the broker receives different compensation from different providers. A broker paid a higher commission rate by certain REPs has a financial incentive to steer you toward those providers regardless of whether they submitted the lowest bid. A broker whose compensation is identical regardless of which provider you choose — the standard model — has no incentive to steer.
A broker who evaluates your account based only on monthly total kWh will produce a legitimate but suboptimal auction result. For Texas commercial accounts above 20 kW — which includes most businesses beyond small retail — the demand charge component of your bill can represent 30–50% of total cost. The supply contract structure affects how much of that demand cost you pay.
A knowledgeable broker will request or pull your 15-minute interval data from your TDU, identify your peak demand pattern, note whether your peaks are caused by identifiable events (simultaneous equipment starts, HVAC compressor startup, production shifts), and present supply contract options that account for demand structure, not just supply rate.
For industries with high or volatile demand profiles — manufacturing operations, convenience stores, restaurants, and laundromats — demand charge optimization can produce more savings than the supply rate improvement alone. A broker who doesn't discuss demand charges when evaluating your account either lacks the expertise to do so or isn't looking at your full cost profile. See our guide on Texas commercial demand charges for what a broker should be explaining to you.
The supply rate on a Texas commercial electricity contract is the number most businesses focus on. It's not the only number that matters. Three contract terms can erode or eliminate the savings from a competitive supply rate:
Auto-renewal clauses. Most Texas commercial electricity contracts include an auto-renewal provision that renews the contract at a new rate if neither party terminates within a specified notice window before expiration. These clauses vary significantly in their terms: some require 30 days' notice, others 60 or 90 days. The renewal rate varies from a specified fixed rate to a variable holdover rate. A broker who doesn't walk you through the auto-renewal terms of every contract you're evaluating is leaving a significant risk unaddressed. For details on exactly how these clauses work, see our guide on Texas commercial electricity contract auto-renewal.
Early termination fees. The ETF structure determines what it costs to exit the contract early if your business circumstances change — a facility closure, a lease change, a major load reduction. ETFs are typically structured as per-kWh for remaining months or a flat dollar amount. A broker should explain the ETF for every contract being evaluated, not just the supply rate.
Pass-through provisions. Some Texas commercial supply contracts include regulatory pass-through provisions that allow the provider to adjust your supply rate for regulatory changes during the contract term. These are common and often reasonable, but they mean your supply rate isn't fully fixed. A broker should identify whether any contracts being evaluated include pass-throughs and explain their scope.
Texas has five TDU territories with meaningfully different rate structures, delivery charge levels, and market characteristics. A broker who primarily works Oncor territory accounts in Dallas may not understand the specific rate class structures in AEP Texas territory that are essential for accurate procurement in Corpus Christi or West Texas. A broker who works primarily with office buildings may not understand the demand charge dynamics of church procurement or the load profile considerations specific to multifamily properties.
When evaluating a broker, ask specifically: what TDU territories do they regularly work in, and what industries do they serve most frequently? Ask for specific examples of accounts similar to yours that they've run auctions for recently. A broker who can speak specifically to the procurement characteristics of your industry and TDU territory is more likely to produce accurate load profile analysis and better auction results than a generalist who treats every account as a commodity.
After the auction runs, a broker should present every qualified bid in a standardized format that allows you to compare total delivered cost for your specific usage profile. The bid presentation should show: supply rate (energy charge per kWh), estimated demand charge structure, contract term, early termination fee, auto-renewal terms, and estimated total monthly bill at your specific usage level.
A bid presentation that shows only supply rate, or that summarizes bids in a format that makes direct comparison difficult, is not giving you the information you need to make a sound decision. You should be able to identify the bid with the lowest total delivered cost for your account, not just the bid with the lowest headline rate.
Technically yes, but it creates complications. Multiple brokers submitting the same account to the same providers can result in duplicate bids that providers will typically disqualify, reducing the effective number of competitive bids in your auction. The cleaner approach is to select one broker, authorize them to run the auction, evaluate the full bid set they present, and then decide whether to proceed.
In the standard Texas commercial broker model, the broker earns a commission from the winning REP at a fixed per-kWh rate, typically 0.02–0.05¢/kWh. This commission is built into the supply rate at the same level whether you use a broker or contact the provider directly. You don't pay more for using a broker. Because competitive pressure from the auction drives the winning rate below what direct procurement produces, the net result is a lower bill than you'd achieve without a broker.
Your most recent electricity bill, your account number, and your contract expiration date. A broker can typically pull 12-month usage history and interval data from your TDU using your account number, so you don't need to compile billing history yourself. Knowing your expiration date lets the broker structure the auction for a forward-start or immediate-start contract appropriately.
Accounts spending $800 or more per month on electricity generally see meaningful dollar savings from a competitive auction. Below that threshold the absolute improvement is smaller but still real. For multi-location businesses, the relevant threshold is total portfolio spend across all locations, not individual location spend.
At EnergyBrokerTX, our PUCT license is #BR260054, our compensation is fully disclosed, and we present every bid in a standardized total-cost comparison. Submit your current bill to contact us and we'll run a competitive auction with 25+ licensed Texas providers and walk you through the full bid set. No cost. No obligation. Serving Dallas, Houston, Fort Worth, and all of Texas.
