Chris Billing is Head of Indirect Sales, responsible for overseeing the relationship that npower’s Industrial and Commercial team has with energy consultants and brokers. Here he talks about the forthcoming Ofgem Code of Practice for TPIs.
Promoting good conduct among energy consultants and brokers
By this time next year, Ofgem plans to be ready to implement a new Code of Practice that all third party intermediaries, consultants and brokers working within the business energy sector will be required to sign up to. Exactly how it’s going to look, and who will fund it, is yet to be decided. But anyone working in this field will need to know – which is why we’re sharing the latest information with you here.
At our recent series of TPI regional roadshows, participants were especially keen to hear from our Ofgem presenter to find out more. At the time, much was still up in the air as a consultation had been extended to hear from more sector participants. But last month, Ofgem reported back on its findings.
Independence is key
The aim is to establish an independent governing body able to vet, accredit and then monitor market participants. A definition as to who exactly must participate is still to be agreed – companies of all sizes will certainly qualify, but it’s not yet certain if independent agents will also be included.
Regardless of scope, a key challenge will be to accredit all the relevant market players in a relatively short timescale, as it’s feared that any accreditation lag could harm reputation and reduce market share. This could prove labour intensive with between 1000 and 2000 participants under review.
Conditions imposed on suppliers could also complicate matters initially, as there is expected to be a new licence restriction that means energy companies can only work with licensed TPIs. We anticipate a transition period will be introduced to revolve possible accreditation delays.
Cost should not be a barrier
How to fund the new governing body is also to be decided.
Our own view is that accreditation should be low cost and certainly not a barrier to joining. But the governing body will need sufficient resources to ensure effective and rigorous monitoring of market participants, and be suitably equipped to take remedial action where required.
Trust vital – but how much transparency?
In the energy industry, trust is an important issue. Concern over confidentiality is one of the reasons why no trade association has yet succeeded in attracting the majority of TPIs to join up.
Yet Ofgem could force the market to embrace greater transparency if ideas to make it mandatory for TPIs to reveal fees and product scope are included within the Code of Practice. However, this could prove unpopular – and many would argue, potentially damaging to business – so it remains to be seen if this will end up being implemented.
A welcome development
That said, many TPIs welcome this code. As a supplier, we’ve also been lobbying for some time for its implementation.
For years, reputable companies have been operating under self-imposed regulations to demonstrate best practice. Sadly, a few rotten apples have cut corners and been exposed for rogue practices – and unfortunately this has tarnished the whole sector. But a new mandatory Code of Practice will aim to eliminate bad practice and restore trust in the industry.
However, we appreciate that the introduction of this new code will create extra work for TPIs.
Supporting TPIs with the process
From our perspective, we are committed to doing all we can to ensure the code is set up to be successful from the outset, and that the implementation process is as smooth as possible. So we’ll be liaising with Ofgem on behalf of our TPIs, and npower’s policy experts will be looking at the finer detail and sharing important findings.
Like the TPIs we work with, we’ve also got our eye on our mutual customers and getting this right for them. So we’ll be keeping the wider market informed too and providing regular updates.
Ofgem has already started the development process to finalise governance arrangements and the code’s provisions. If you have any comment you’d like to share, you can either contact Ofgem direct (via [email protected]), or please get in touch with me, as I’ll be happy to pass on any feedback within the wider discussions we’ll be having with Ofgem ([email protected]).
In the meantime, as new developments are announced, I’ll keep you posted.
This is a sponsored article.