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Energy Brokers

With the deregulation of commercial energy in the United States, energy brokers have started to operate in a number of states.

An example is Ambit Energy, which works with electric power and natural gas in nine states. You can read Ambit Energy reviews and reviews of other power and gas companies online so that you can make the right choice of which company to use.

Because electricity and natural gas are commodities, their prices change each day as a result of market actions. The energy broker arranges to take advantage of favorable energy price swings, and protect the consumer from sudden cost hikes. Some energy brokers are able to bundle, or aggregate, clients who have a similar demand and usage profile to obtain additional leverage over the suppliers when it comes to negotiating rates. They often have the ability to use sophisticated computerized tracking programs to find the best rates on a real-time basis. They may use a sealed big auction system to bring order into what is usually a chaotic market. In addition, they can save money by buying in bulk.

It is important to keep in mind the fact that energy brokers do not actually ship electricity or natural gas to individual consumers or businesses who subscribe to their service. It is all a matter of billing and allocation. In the American utility system, a local utility company is responsible for maintaining the lines and providing the actual power. In the past, before deregulation, the local utility had monopoly powers that allowed it to dictate the origin of the power it sold. Today, energy brokers can determine the origin of the power, while the local utility continues its function of maintaining the lines. That portion of the utility bill that deals with connections and lines is the same in either system, but the portion dealing with the source of the power can vary. The local utility takes care of sending the bill and collecting payments, but passes any energy broker savings on to the consumer.

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