How to Spot Hidden commissions In Your Energy Contract
In the world of commercial energy, transparency is surprisingly rare. While some brokers are up-front about their fees, a significant portion of the industry still relies on “hidden” or “embedded” commissions—fees that are baked directly into your unit energy rate without your knowledge.
The “Free” Service Myth
If a broker tells you their service is free to you because “the supplier pays us,” you should be on high alert. Suppliers do not pay brokers out of their own margins; they add the broker’s commission on top of the wholesale price. By telling you it’s free, they are avoiding a conversation about the value of their service versus the massive cost you might be incurring over several years.
How it’s hidden
Commission is usually added as an “uplift” in p/kWh. For example, a broker might add 0.75p/kWh to your rate. On a business using 500k kWh per year, that is **£3,750 per year**—or £11,250 over a 3-year contract. If you have 10 sites, you are potentially paying over **£100,000** for a simple brokerage service that took them just a few hours to complete.
How to spot the “Uplift”
Unless you are a market expert, spotting an uplift is difficult by looking at a single bill. However, you can use these forensic tactics:
- Request a Proof of Tender: Ask for the original, unedited pricing sheets sent by the suppliers to the broker. If they refuse to show you the supplier’s raw response, they are hiding an uplift.
- Check the “Letter of Authority” (LOA): Many LOAs contain clauses that allow the broker to “add a reasonable margin” at their discretion. Never sign an LOA that doesn’t define the commission cap.
- Cross-Reference with Wholesale Data: If your quoted price is significantly higher (more than 1-2p) than the current wholesale market price for that day, and your consumption is large, a heavy commission is likely present.
The Inenergy Stand
We believe in **Total Fee Transparency**. When you work with us, our fees are a clearly defined line item or a disclosed margin that you approve before the contract is signed. We believe that professional advice is worth paying for, but we also believe you should know exactly how much you are paying for it.
Audit Your Existing Contracts
If you have an existing contract and you’re not sure how much you paid the broker, we can help. Our forensic audit team can look at your historical rates and wholesale market data from the day you signed to calculate exactly how much commission was embedded in your deal.
Don’t leave your energy budget to chance. Start your audit today and take back control of your utility costs.
