Cost Saving by Gemma

Procuright as a Third Party Intermediary (TPI) in 2019

While we await the next steps on a Third Party Intermediary (TPI) specific code of practice, Ofgem has issued a very useful document in association with the Citizens Advice Bureau on what small businesses need to know about TPIs. We believe it will be very useful, especially if it is well publicised by TPIs and suppliers (so this is us doing our bit). It covers some important areas that businesses may not have been fully aware of in the past, rebuffing some of the myths and mystery surrounding the often muddy TPIs and business energy in general.

The document provides transparent and honest answers to questions such as "will a TPI always find the best energy deal for you?", "do TPIs always research the whole market?" and "are you obliged to accept an offer from a TPI?" - all of which may not necessarily have had frank, honest answers if businesses themselves asked them of some TPIs.

Businesses are also informed of the main operating principles that they should expect of any TPI they work with, including: accuracy, customer-focus, honesty, professionalism, respect and transparency. These principles are important as they have been defined by Ofgem, presumably to be evaluated against, should it need to apply its powers under the Business Protection from Misleading Marketing Regulations. Regardless of the code of practice, these regulations must be complied with by ALL TPIs. The document provides businesses with information as to what they should do if they are not satisfied with their TPI.

Although the factsheet provides all the important essential information a small business should know about TPIs, there is one area of the factsheet which we believe could be sharpened up. It concerns TPI commissions (illustrated above). Ofgem provides an indicative commission of 1p/kWh however, if this is an indicative figure, we believe this to be at the high end of the commission range we would typically expect a SME TPI to receive from suppliers. We believe that typical SME commissions for electricity acquisition contracts are in the range of 0.5p/kWh to 0.7p/kWh and 0.3p/kWh to 0.5p/kWh for gas acquisition contracts. There is anecdotal evidence of rising commissions, especially led by some of the smaller independent suppliers. However, it would be unfortunate if the factsheet were used to support this trend.

"The document provides transparent and honest answers to questions such as "will a TPI always find the best energy deal for you?"........."