Energy brokers WILL have to join code to work with suppliers – Ofgem

Suppliers will only be able to work with energy middlemen if they are signed up to a new code of practice, under plans confirmed in a letter from the regulator […]

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By Vicky Ellis

Suppliers will only be able to work with energy middlemen if they are signed up to a new code of practice, under plans confirmed in a letter from the regulator Ofgem yesterday.

There are still creases to be ironed out in the plans to protect business energy users from cowboys and bad practice but the regulator seems to have settled on a course of action after talks with industry.

Ofgem pushed back its deadline for feedback by a month in the wake of ELN’s code of conduct crusade to highlight the issue. Originally the plans had been criticised for being “too vague”.

Shying away from fully licensing energy brokers, consultants or third party intermediaries (TPIs), instead they will have to be clear with businesses about their fees, the services they offer and which suppliers they represent.

These requirements will be part of the code, Ofgem said in the letter to industry.

A licence condition for suppliers to work with code-registered TPIs could be in place by the end of 2015.

The energy watchdog cited “broad support” for its proposals, saying a majority of respondents (41 out of 62) in favour of “a mandatory code of practice underpinned by a supplier licence condition”.

This support was “conditional” for a few, according to Ofgem, on the final requirements of the code.

It will be the responsibility of each supplier to check a TPI they work with is accredited under the code.

There had been some worry about who would keep an eye on the code and enforce it.

To counter this, Ofgem confirmed an independent board will oversee the “ongoing day-to-day management of the code”, including amongst other things monitoring of code compliance.

Out of 62 responses, the majority (39 or 63%), were from TPIs and TPI trade associations. A quarter (16 or 26%) were from energy suppliers including the Big Six and Energy UK, while six (9%) were from consumer representation groups and a response from Gemserv.