Over the past few years, there has been a tremendous transformation in the energy markets. More consumers are turning to Third Party Intermediaries (TPIs) for assistance with a range of energy-related services as a result of increased complexity brought on by market uncertainty, new rules and regulations, taxes and an increase in renewable energy.
Since the procedure is different from getting a quote for your house, a TPI can help you when getting an energy quote for your business. Their job is to provide you with energy-related advice in order to assist you in managing your energy demands and/or purchasing energy. TPIs include energy brokers, switching sites, and any business that provides assistance with energy purchase.
You shouldn’t feel like you have to use a TPI’s services, whether you contact them directly or they reach out to you. Your energy supply agreement will always be with an energy supplier; the TPI does not provide your energy.
Over 70% of UK businesses in the I&C sector now support their energy needs with a TPI. The reduction of annual energy spend is a major factor in the decision to work with one, but the biggest benefit a TPI can frequently offer is the time it also saves you.
How are you compensated for your services?
TPIs can charge in a variety of ways. Some prefer a one-time charge, while others will incorporate a commission in the price the supplier offers you. Check that the TPI’s target payments are appropriate and won’t wind up costing you extra if they operate on a performance-related payment system. No one method of payment security is “correct”, what matters is what your business needs and what your objectives are.
Which Suppliers do you work with?
Certain TPIs only represent one supplier or a few suppliers. This can limit your purchasing alternatives and decrease your chances of finding the best offer. When soliciting bids, your TPI should visit as many suppliers as they can.
A TPI who just presents you with rates from a select few suppliers may offer more enticing terms, however this would indicate that their suggestion is centred on what is best for them rather than your company. Prices change regularly, and in some cases hourly, since suppliers have different viewpoints on how they should value risk premiums in fixed price contracts and have differing access to wholesale markets.
Don’t let the spread of your TPI’s clients discourage you, either; it may be that they are clustered around a few important suppliers since they are providing the best terms.
What services do you offer?
TPIs now provide a wide range of services in addition to the traditional energy contract procurement services. The management of metering, bureau services, generating projects, energy efficiency, trading strategies, and the constantly shifting regulatory environment are now demanded of TPIs. Understanding the quality of service your TPI can provide in the pertinent areas and the continuous assistance you will receive once a procurement exercise is over is vital depending on what is important to your organisation.
Request a copy of a Service-Level Agreement (SLA), an example contract, or any comparable agreement that outlines the services your TPI is providing, the time frame for delivery, and a list of any related costs. These fees should be in line with the level of assistance you will receive from them during your contract. You can avoid paying for services you won’t use or being obligated to a contract term that is longer than you would like to be if there is transparency in the agreement at this point. Make sure there is a practical mechanism to leave the agreement.
How can you help me choose the best energy deal?
Any purchasing choice will always be influenced by price, but it is also vital to think about the kind of service you may expect from a provider. This is where the knowledge of a TPI will be most valuable. Each supplier’s suite of goods, accuracy of billing, responsiveness to inquiries, and other relevant information should be known to your TPI. To ensure that they are taken into account in your decision-making, they should also exhibit understanding of the larger energy market, third party expenses, and other variables that may have an impact on your business or sector.
Do you follow all rules and regulations?
TPIs are required to abide by all consumer protection regulations, including those that apply to commercial clients. For instance, a TPI must always identify itself and be explicit about the reason for its call because it is against Business Protection from Deceptive Marketing Regulations (BPMMRs) to engage in misleading advertising activities.
There are many other different rules and regulations brokers must comply with in order to sell energy to businesses. More recently, Ofgem has decided that energy suppliers will only be allowed to work with TPIs who are registered to the new, approved dispute resolution scheme. The scheme allows TPIs to keep selling energy contracts and allow them to maintain relationships with their microbusiness customers and suppliers. This has been done with the goal of protecting the customer and ensuring if there are any issues, that it can be handled un-biasedly and fairly.
There is also The TPI (Third Part Intermediary) Code of Practice is a set of standards within the energy industry, designed to protect businesses and ensure you are being treated in a fair, responsible and trustworthy way.
Language to look out for:
“Free”
Unless the organisation is a registered charity, proceed with caution around anything presented as “free”. More than a third of businesses believe their TPI is providing a free service, but the fee will be built in somewhere.
“The supplier pays us”
This is a sign that you may be dealing, not with a credible or impartial TPI, but with a sales agent acting on behalf of one or more suppliers. A sales agent’s goal is to earn commission by placing customers with those suppliers, not to find your business the most suitable energy contract.