How does a commercial energy broker work?

If you have ever looked at a commercial electricity or gas bill and felt like it was written in another language, you are not alone. Commercial energy pricing in Australia can include multiple layers, usage charges, demand charges, network tariffs, environmental scheme costs, and contract terms that can materially change your total spend.

A commercial energy broker helps you navigate that complexity. They act as an intermediary between your business and energy retailers, and they run a structured energy procurement process to source, compare, and negotiate offers that suit your load profile, risk appetite, and operational needs.

This guide explains the process step-by-step, what you need to provide, what decisions you still control, and what to watch out for so you can get value from the broker tender process without surprises.

What a commercial energy broker actually does

A commercial energy broker is a specialist who helps businesses buy electricity and gas more effectively. In practice, that means they:

Analyse your recent invoices and, where relevant, interval meter data
Identify cost drivers such as demand peaks, tariff mismatches, or pass-through charges
Run a competitive tender to multiple retailers, then compare offers apples-to-apples
Negotiate pricing structure and contract terms, not just a cents per kWh rate
Manage acceptance, paperwork, and switching coordination with the retailer
Provide ongoing contract and billing support so you do not drift onto uncompetitive rates

In Australia, the broker will typically work with a panel of licensed retailers. For larger commercial and industrial business energy customers, the broker may also discuss different contract structures and timing strategies that better match market conditions and your budgeting requirements.

Step-by-step: How the energy procurement process works with a broker

While every business is different, most broker-led energy procurement follows the same core stages.

Step 1: Initial discovery call and goals

The first step is a short call to understand what you are trying to achieve. Common goals include lowering total cost, improving budget certainty, consolidating multi-site contracts, adding renewable options, or improving contract governance.

You will usually be asked about:

Number of sites, and whether they are in one state or multiple states
Approximate annual usage and any recent operational changes
Contract end dates and whether any sites are at risk of rolling onto higher rates
Preferences for contract length, fixed versus more flexible structures, and green options
Billing needs, for example consolidated invoicing or aligned start and end dates

Step 2: Data collection, bill review, and interval data (if applicable)

The broker will review your bills to build a baseline. For many larger sites, interval data is essential because it shows how you use energy across the day, not just how much you use in total.

At this stage, the broker may identify quick wins that do not require a retailer change, such as:

Tariff or demand threshold issues that inflate network charges
Unexpected fee types or pass-through charges that are poorly understood
Sites with outlier performance compared with similar sites
Billing anomalies worth validating with the retailer

Step 3: Letter of Authority (LOA) to engage retailers

In many commercial procurement engagements, you will be asked to sign an LOA, a Letter of Authority. This is a permission document that allows the broker to request information and speak to retailers on your behalf within defined limits.

An LOA typically allows the broker to:

Request historical usage and billing information
Confirm contract end dates and key account details
Seek quotes from multiple retailers based on your data
Handle switching paperwork after you approve an offer

It does not mean you have agreed to switch. It allows the broker to run the market process properly. If you want more detail before signing, read Zembl’s guide: What’s a LOA and why sign it?.

Step 4: The broker tender process (going to market)

Once data is validated and the requirements are clear, the broker will go to market. This is often called an energy tender. The broker prepares a request that summarises your load and requirements and sends it to a panel of retailers.

The tender pack commonly includes:

Site list, NMI or MIRN details, and current retailer (where relevant)
Consumption and demand information, including interval data where available
Preferred contract start date and term options, for example 12, 24, or 36 months
Any special conditions, for example green products or volume flexibility
Any billing or portfolio requests for multi-site organisations

Retailers then respond with pricing and terms. A good broker will ensure the responses are comparable and will call out exclusions, assumptions, and hidden cost risks.

Step 5: Offer comparison and recommendation

This is where the broker should add the most value. Retail quotes can look similar on the surface, but the real difference is often in the underlying structure and contract terms.

A thorough comparison should cover:

Energy rates and how they apply, including time of use where applicable
Network and pass-through charge treatment, and any escalation clauses
Demand charges and how your demand profile impacts total cost
Fees and charges, for example late fees, metering charges, or administration fees
Credit requirements, guarantees, or billing cycle conditions
Contract flexibility, for example adding or removing sites and volume tolerance bands

The broker should also explain trade-offs clearly, such as the balance between shorter contracts for flexibility versus longer contracts for price certainty.

Step 6: Negotiation with retailers

Brokers typically negotiate with shortlisted retailers. Negotiation can involve:

Improving headline rates
Adjusting risk allocation for pass-through charges
Refining contract terms, for example termination or site change provisions
Clarifying special conditions that affect multi-site portfolios

Negotiation also includes making sure you understand what you are accepting, and that the documentation matches what was quoted.

Step 7: Your decision and formal acceptance

You choose the preferred option. The broker then coordinates acceptance, contract signatures, and the retailer onboarding process.

At this stage, you should expect a clear summary of:

The sites included
Start date and end date
Rates and how they are applied
Any special conditions or approvals required

Step 8: Switching and implementation

Switching is largely administrative. For most Australian commercial energy businesses, a change of retailer does not involve a disruption to supply. The physical poles and wires are still operated by your local network distributor, and the market process manages the retail transfer.

Your broker should:

Track progress to ensure the contract goes live on the correct date
Help resolve issues if the first invoice looks inconsistent with the agreed terms
Coordinate metering or account updates where required

Step 9: Ongoing support after the contract starts

The best results usually come from ongoing management, not one-off procurement. Depending on your needs, ongoing support can include:

Bill validation and query management
Annual network tariff review to check if your tariff remains suitable
Monitoring contract end dates and starting renewal planning early
Portfolio management for multi-site businesses
Support for efficiency upgrades, solar, batteries, or demand management initiatives

What you need to provide to get accurate quotes

Retailers price risk. The more accurate the data, the more confident the pricing. Most brokers will ask for:

Recent electricity and gas invoices, usually 12 months if available
Interval data for larger sites, or at least demand details where shown on bills
Site and tenancy details, especially if you have recently moved or changed operations
Preferred contract start date and term range
Any sustainability requirements, for example renewable matching or reporting needs

How brokers are paid, and what to ask about transparency

Broker remuneration varies. Some brokers charge a direct fee, some are paid by retailers, and some use hybrid structures. What matters is transparency and understanding how incentives work.

Before you proceed, ask:

How are you remunerated, and is it included in the offered rates?
Which retailers will be included in the tender, and why?
Will you show all retailer responses or only shortlisted offers?
What ongoing services are included after signing?

Clear answers help you compare brokers, not just retailers.

Common pitfalls in the broker tender process

Focusing only on cents per kWh: Demand and network charges can dominate the bill for many sites.
Not aligning the contract to operations: If your load changes, the contract should handle volume risk appropriately.
Starting too late: If you wait until the last minute, options can narrow and you may end up on higher default rates.
Not understanding pass-through charges: You should know what is fixed and what can vary during the term.
No plan for renewals: Procurement should be a cycle, not a one-time event.

Australian market context that affects procurement

Energy procurement in Australia sits within a regulated market structure. While a broker is not a regulator, a good broker will explain how these pieces affect your contract:

Wholesale market volatility: Prices can move with weather, outages, policy changes, and transmission constraints.
Network tariffs: Distribution charges are set by network businesses and can change annually, they are often a major part of total cost.
Metering and data: Interval data quality affects pricing and helps identify demand reduction opportunities.
State differences: Eligibility thresholds and available products can vary, for example the large customer threshold in SA is commonly higher than in other NEM states.

When should you start the process?

Many businesses start a review well before expiry, especially larger users. Starting early gives you time to gather data, run a competitive tender, and choose a start date that suits your budget cycle and operational plans.

Triggers to start include:

Contract expiry within the next 3 to 12 months
Opening, closing, or relocating a site
Large new equipment or electrification projects
Material bill increases without a clear explanation

How Zembl runs commercial procurement

Zembl supports Australian businesses through a structured procurement approach, from bill review and tendering through to switching and ongoing contract management. If you want to see what that looks like at a high level, explore:

Frequently asked questions

Will my power go off if I switch retailers?

In most cases, no. Supply is maintained through the network distributor, and switching is a market and billing transfer process.

Is an LOA the same as signing a contract?

No. An LOA usually authorises the broker to request information and seek offers on your behalf. Contract acceptance happens later, after you approve a specific offer.

How long does the process take?

Timing depends on data availability, number of sites, and retailer response times. Many tenders can be completed within days once invoices and interval data are provided, but complex portfolios can take longer.

Can a broker help if I do not want to switch retailers?

Yes. A broker can still benchmark your current contract, negotiate with the incumbent retailer, or identify savings via tariff changes and billing improvements.

What is the difference between an energy broker and an energy retailer?

The retailer sells and bills the energy. The broker helps you compare retailers and negotiate terms, and may help manage the process end-to-end.

Next step: get an obligation-free market check

If you want to understand whether you are paying competitive rates, the quickest next step is to share a recent bill and confirm your sites and contract end dates. From there, a broker can advise whether a tender is likely to deliver savings, and what contract structure may fit your business best.