Since Ofgem postponed the mandatory code of conduct for third party intermediaries (TPIs), there has been a lot of talk about transparency in the energy sector. Some procurement managers are still misinformed about TPI charges and believe that suppliers are paying TPI fees.
That is not the case, as TPIs will simply negotiate a commission with the supplier and include it in the energy rates. In other words, the end energy user is paying the TPI’s commission, sometimes without agreeing the exact value of it.
This is why I believe a known fixed fee is the foundation of a truly transparent service.
However, one of the historical obstacles in paying a direct fee has been the lack of a central budget and the time spent allocating these fees.
This can be overcome by providing customers a site by site breakdown of the fees so that they can be allocated to each site’s P&L account. The result is knowing exactly what you are paying for.
A fixed fee system also prevents your TPI charges from fluctuating with your energy consumption, ultimately giving you more control over your energy costs and providing budget certainty.
Non transparent TPI contracts
Several procurement managers I have spoken to recently have stated that they are keen to move to a known fixed fee but are forced to continue with a commission based contract as they cannot exit their existing TPI contract, due to complicated notice periods. Shouldn’t TPIs make their terms clearer?
Being transparent does not stop with fees
It is important to highlight that fees are not the only driver in a transparent TPI service. I believe that the key is giving your customer full control over their costs and data.
That is why we ensure that copies of all utility bills are made available to our customers via a very simple online portal. Our customers also have access to comprehensive consumption reports, which are used to manage and plan energy budgets and procure better utility contracts.
Our ethos at STC Energy is to provide customers with a complete procurement and bureau solution that will increase their control over energy costs and give them confidence in the value we offer them.
ESOS & P272 updates create confusion
The recent updates with P272 and ESOS are also a matter of concern for end energy users and I think is important that your TPI can advise and support you with this, since some of the updates are easily misinterpreted, especially the ESOS deadline.
If you have concerns about ESOS and P272 or would like to find out more about STC’s transparent service, come and have a chat with us at stand 12 in the network zone at Energy Live 2015 on Nov 5th at the Barbican. You can also call 020 8466 2915 to arrange a free personal consultation on the day.
Alan Little is the Energy Expert and Business Development Manager at STC Energy – a specialist energy management consultancy and leading provider of bureau services in the UK.
This is a sponsored article.