For years Consultus International has been at the forefront of efforts to get the Third-Party Intermediaries (TPI) sector in which it works, regulated. The adoption of common approaches and standards across the energy consultancy industry would be of enormous benefit to end users, providing them with the reassurance and transparency that has been lacking since energy sector liberalisation back in the late 1990’s. Many attempts have been made by different parties, but the lack of a single party responsible for setting and monitoring the parameters has always been an issue; however, that situation now seems set to change.
Government (lack of) Policy
For decades, and successive governments, the issue of consumer protection within the energy industry has been high on the agenda. As major geo-political events have driven energy prices higher, it was always going to be politically expedient to appear on the side of the end user. However, this never quite made its way through to the full regulation of the TPI industry, even though over 70% of the Industrial & Commercial sector, plus an ever-growing proportion of the SME market, relies on a TPI for access to the energy markets.
It was largely a question of time; successive governments have not found room in a busy political agenda to decide who they felt was best placed to take on the task, leaving a legal loophole that has allowed the TPI sector to go unregulated.
Instead, for years, the industry itself tried to find solutions, although for many reasons no consensus was reached.
Supplier? TPI’s? Energy industry? Anyone?
A thornier issue with TPI regulation has always been in agreeing on the set of rules by which TPIs should adhere. An industry that is characterised by a plethora of one-man bands, small consultancies and larger corporates has been difficult to unite behind a single cause, especially as some have vested interests in particular ways of working which may, or may not, always benefit their customers.
Suppliers likewise have been reluctant to get involved, especially as a united front. Again, each supplier has their own way of working and charging their clients, and combining all suitable practices into a single approach has proven impossible.
More recently, NESO (the National Energy Systems Operator) and Ofgem have looked at their status as potential regulators, but neither were found to have the legal mandate from the UK government to fulfil the role, whilst RECCO (Retail Energy Code Company) has set about creating its own Code of Practice in lieu of anything else. It seemed that regulation would be once again a distant prospect whilst the government legislates.
And the winner is…Ofgem
A government consultation was launched in late 2024 to seek opinions on how a TPI regulated market might be set up and managed. The government proposed models ranging from “Do nothing” to a strict “specific Authorisation regime” (requiring pre-qualification for TPIs to access the market). Reponses were, as expected, quite diverse in terms of how much power a regulator should be afforded.
Now, almost 12 months after the end of the government consultation it has been announced that Ofgem will be given the authority to regulate the TPI market, albeit it still requires state legislation to be passed. This is unlikely to come until late 2026, but Ofgem will begin to assemble its thoughts and ideas as to the structure of the TPI market going forwards during the first half of the new year.
An overwhelmingly positive thing
Consultus is, and always has been, in favour of eliminating bad practice from the TPI market through regulation, believing it will end rogue tendencies and provide assurance to customers, ultimately building trust. Consultus looks forward to working with Ofgem to help shape the industry as work as a force for good for its clients in the years to come.
By: Steve Atkins – Head of Customer Experience
