Regulation of UK energy consultants, or how to save 3p per kilowatt hour

Avoid getting flipped for real...
Avoid getting flipped for real…

Ian White, Director of Strategy at alfaenergy writes in this sponsored post about a different trilemma for the energy market to tackle, regulation of consultants.

The majority of the TPI community want regulation (alfaenergy included), but there is a feeling that whatever regulation looks like, it will fall short of resolving the bigger issue around transparency. I see three reasons for this:
Challenge 1 – The suppliers
I often hear how some TPIs ‘rip off’ consumers by adding up to 3.0 p/kWh commission onto supply contracts. That’s pence per kWh, not therms! To the traditional TPI, these fees seem absurd. I agree. However, the TPIs that add these commissions can only do so if the supplier(s) permit it. If they permit it, they condone it. If they condone it, they need to be accountable for it. If I was to drive a robber to a bank and wait in the car while he robbed the place, I would be an accessory. I’m not saying that suppliers are complicit in rogue TPI activities, but by offering massive commission levels as an incentive, there has to be acknowledgement from the supplier community that these fees will promote undesirable behaviours from some TPIs. Ultimately, the consumer experience, and their business, will suffer. The regulatory mandate should not lay solely at the door of the TPI.
Challenge 2 – The consumers
Three pence per kWh. I had to write it again; it beggars belief, more so that anyone would agree to sign a contract at these commission rates. If your energy spend matters to you and your business, it is important to have an idea of what a good price is.
If you are an SME business:
Review the unit rates on your renewal letter. This will give you a good steer on current market rates.
Ask for market intelligence data from your TPI/supplier. Get a feel for what the market has done since you last renewed.
Avoid verbal contracting – if a TPI promises that they can save you 40%+ in the first few seconds of talking to you, ask yourself how they know that without having your details, then run a mile.
If you are a larger user, you’re likely closer to the market than most, but there are still pitfalls. More on that later.
Ultimately, the consumer needs to be making the most informed decision for their business to mitigate against mis-selling. That comes through research and understanding. Without this education, rogue brokers will continue to profit from bad buying decisions.
Challenge 3 – TPIs
Where there is money to be made, there will be rogues willing to do/say anything to make a sale. However, no matter what regulation is put in place, they will find a way. It is not them I would like to focus on. The challenge I see is driven by the influx of cash. A multitude of mergers, acquisitions and flotations has meant that for some TPIs the core focus is no longer the consumer. 
There is pressure to answer to the city, shareholders, or private equity partners. Therefore, it isn’t a surprise that those at the coalface are driven to push high commissions. The demands from their management in the pursuit of the best financial return/result is the highest priority.
I also hear that this is an SME TPI issue. Not true.
Many ‘bigger boys’ play a similar game, where the risk they now manage is shareholder value rather than client exposure. Not declaring transaction charges carried out as part of a risk management strategy is tantamount to the same level of exploitation as massive uplifts. It is either transparent or it isn’t, either fair or not.  It is not fair.
As each stakeholder points at each other, it is about time we were all more honest with each other to forge a coherent energy community. Who should drive that? Government, TPIs, suppliers, consumers? They are all part of the problem, they should all be part of the solution.
If you are an energy consumer, TPI, or supplier and would like to discuss this further with Ian, please do by emailing him on


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