Third Party Intermediaries: What your small business needs to know
Third party intermediaries (TPIs) are organisations or individuals that give energy-related advice, aimed at helping you to buy energy and/or manage your energy needs. TPIs include switching sites, energy brokers and any company that offers support with energy procurement. Whether you approach a TPI directly or they contact you, you should not feel under pressure to use their services. Your energy supply contract will always be with an energy supplier: the TPI does not supply your energy.
A TPI can support you when getting a business energy quotation as the process is different from getting a quotation for your home.
• There are very few published prices in the business market and you need to contact suppliers to obtain a quotation.
• There is no obligation to supply you – a supplier may determine which customers they choose to supply by factors such as size of supply or your credit rating.
• There is generally no cooling-off period after you agree the contract (even when this agreement is made over the telephone rather than in writing).
• The contracts may last for multiple years and may have an early termination fee if you wish to change supplier before then.
Important questions to ask a TPI before you consider using their services
• Which suppliers will you be approaching to get prices?
• How many price offers will you give me?
• What will you do to help me switch supplier?
• What services will you provide during the life of the
• How will I be charged for these services?
Will I be charged directly or indirectly (see over)?
Q: Do TPIs always research the whole market?
A: No. Some TPIs research the whole market but others represent one or a small group of
Q: Will a TPI always find the best energy deal for you?
A: No, TPIs are not necessarily required to find the best deal for you. You could find a better deal if you are prepared to look at different contract lengths or payment methods.
Q: Is agreeing to a contract over the phone binding?
A: Yes, your verbal agreement is binding.
Q: Are you obliged to accept an offer from a TPI?
A: No, make sure you understand the services they will provide for you, how they will be paid for these services and all terms and conditions before you accept.
Q: Are all offers presented in the same way?
A: No. Some factors in energy bills may change during the life of the contract (eg environmental tariffs). These may be presented on a pass-through basis (where they will be added to the energy price when the charges are known by the suppliers). Check that you understand whether your price may vary within the term of the contract.
Q: Is there a set duration for contracts?
A: No. Many contracts are fixed term and you should be clear how long you would be locked into the contract and whether there is a termination fee
Third Party Intermediaries:
What your small business needs to know
Paying for a TPI’s services
A TPI will charge for the services it provides you. This could be a direct charge paid by you to them (eg a flat fee, a charge per trade made on your behalf) or indirectly. For indirect payments, the TPI receives a payment from the supplier, which is added to your bill. Below is an illustrative example using simple figures to aid understanding:
Basic cost of energy 10p/kWh > TPI commission 1p/ kWh > Your bill shows 11p/kWh (paid to supplier) > Supplier passes 1p/kWh to TPI eg consumption 50,000 kWh/ annum, TPI receives £500
TPIs must comply with consumer protection laws, including those which relate to business customers. For example,
a TPI is prohibited by the Business Protection from Misleading Marketing Regulations (BPMMRs) from carrying out
misleading advertising activities and should therefore always identify itself and be clear about the purpose of its call.
In November 2013, Ofgem acquired powers to apply to courts for an injunction to prevent breaches of the BPMMRs.
In instances where breaches of the BPMMRs may be criminal offences (which can be enforced by Trading Standards
and The CMA) Ofgem may notify these enforcers of concerns, where appropriate. Ofgem does not license TPIs but
has set out voluntary principles showing how they should operate, below.
Energy4 follows the principles and professional behaviour standards of OfGem and the TPI Programme
Honesty, Accuracy, Respect, Transparency, Customer-focused, and Professionalism