Total transparency: what new legislation means for business energy consumers

03/12/24

October saw the launch of new legislation around the transparency of fees paid to agents as part of Ofgem’s Non-Domestic Market Review.

From 1^st October, all energy suppliers are required to disclose how much money they are paying to Third Party Intermediaries (TPIs), such as brokers or energy consultants. This is to ensure better transparency of charges between these third parties, energy suppliers, and business customers.

These measures, introduced by the regulator, are intended to benefit customers by putting an end to ‘hidden’ commission being paid, protecting businesses from unexpected costs and promoting fair treatment across the board.

Greater transparency for business energy customers of every size

For larger businesses, fees have to be clearly disclosed as a cost per unit. For microbusinesses, which would typically be using less than 100,000 kWh of electricity or 293,000 kWh of gas per annum, the total cost of the fees throughout the length of a contract must be displayed.

These measures will be to the benefit of customers when choosing an energy contract or selecting a broker, as going forward, all information they need will be easily accessible, providing a clear picture of exactly what they are paying for.

Tim Jarvis, Ofgem’s director of markets, said:

“Businesses are no different from any energy customer and should be able to expect excellent service and fair prices. However, we have heard from too many businesses, particularly small and medium-sized ones, that this isn’t always the case. Our proposals will ensure better deals, better protection and more clarity for businesses – so they have the best chance of thriving at this difficult time.”

IEC welcomes greater accountability

From IEC’s point of view, we embrace the changes which Ofgem have implemented, as any steps to improve accountability and increase transparency in the energy industry are to be welcomed.

We take pride in ensuring our fees are kept at a realistic level and satisfaction from remaining truly independent. This means we are not tied to any one supplier and can provide unbiased advice to our clients, endeavouring to provide them with a full range of options/solutions to achieve their goals. So, whether that is to secure the best price by negotiating contract terms or helping our customers reach their energy efficiency targets, we will always put them first.

With the introduction of this legislation, we hope that the playing field has been levelled somewhat so that customers will find it easier to compare the services and charges of different TPIs within the marketplace. Of course, there is more to choosing an energy consultancy than simply comparing costs. Finding a consultancy with whom you can create a good professional partnership based on trust is really important.

IEC’s core values are to build truly personal relationships with our clients. In this way, by providing ongoing support, with the benefit of our experience and in-depth market knowledge, we can offer bespoke products and services to provide the most benefit to our clients’ businesses.

To find out how we can help you with our impartial advice and support, get in touch with our team today.