Throughout the year, we’ve reported on Ofgem’s work to review and better understand the behaviours and fees of Third-Party Intermediaries (TPIs) in the energy market.
The independent energy regulator’s latest Non-Domestic Consumer Research is a report for Ofgem by IFF Research (IFF), which builds the organisation’s evidence base on the costs and affordability of energy for non-domestic consumers.
The report’s introduction describes why the research was commissioned: “The research sought to capture non-domestic consumer experiences of the energy market and their needs, now and in the future. It is essential we understand non-domestic consumer experiences and issues to ensure we are making informed decisions. This report presents the findings of this research and is prepared by IFF.”
Following phone-based research, IFF has organised the report into five areas: Energy Usage and Costs; Experience of Changes in the Energy Market; Energy Contracts and Suppliers; Energy Brokers; and Decarbonisation.
Report highlights
The research highlights awareness around diminishing supplier numbers and access to contracts/suppliers while pointing to some negative experiences around supplier failures.
In particular, the Energy Brokers section presents findings of concern for us here at Noveus Energy. There remains a considerable lack of understanding around TPI charging – with 58% of large businesses still believing no fees are involved.
According to the report:
› The vast majority (84%) of businesses who had engaged with a broker thought that the broker “did not or would not charge for their services”, suggesting that most non-domestic consumers were unaware of how brokers would recoup their costs.
› Only a minority (10%) were charged in addition to the contract rates, although this was higher amongst large businesses (41%).
› Where brokers did charge, there were mixed views on the clarity of charges, with close to six in ten (57%) feeling the charges were clear but three in ten (31%) feeling they were not clear.
Our view
If commission is the preferred fee structure, we believe it should always be fully declared and included as a line item on customer invoices. For too long, hidden costs have hampered the energy market and caused dismay among customers.
However, it is our view that fixed fees are the most transparent way of engaging an energy consultant.
While Ofgem’s latest research goes some way to better understanding non-domestic consumer experiences and the issues they face in the energy market, it also shows that there is still considerable misunderstanding around TPI charging. Much work remains to help the market understand these fees and decipher costs.
The market also needs to change and become more transparent. At Noveus Energy, we will continue in our fight for change.
If you’d like an informal conversation about the fees you’re currently being charged, please get in touch via our website’s contact page ›
