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The Topic: TPIs THE TOPIC 12 | 3RD - 9TH JULY 2015 | UTILITY WEEK THIRD PARTY INTERMEDIARIES Opinion: We need transparency in broker fees "Postponing [the introduction of a mandatory code of practice] at all is a terrible idea. We have a situation at the moment in the UK where businesses simply don't know what they're paying for their energy. By using brokers they are putting themselves at risk of much higher fees. "I personally believe that Ofgem has a responsibility to make the procurement process through a broker as efficient and as transparent as possible. My view is that, if this has been postponed, it suggests Ofgem is possibly more swayed by the big brokers and consultancies than it would like to admit. "This should have been something that was in place years ago." Charlie Lass, chief executive, Open Energy Market GETTING IT TOGETHER The relationship between TPIs and suppliers also needs work. Improving transparency lies at the heart of the challenge for TPIs looking to move for- ward in the energy sector. But straight talk- ing and honesty are not only needed between the TPI and its customers – supplier-TPI relationships also need attention. For this reason, EDF Energy last month held a dedi- cated session for its B2B TPIs for the first time at its annual Talk Power Conference. The experimental session brought together around 40 representatives from UK third party intermediaries working in the industrial and commercial energy market. The session aimed to promote open dia- logue between EDF Energy relationship managers and their TPI contacts on the challenges they face in supporting business customers through the regulatory mire that attends the energy market, and around ways to make their interaction more mutually effective. The session focused heavily on the com- plexity of the regulatory and legislative land- scape for industrial and commercial energy users, flagging developments which would need to be carefully communicated by bro- kers and energy advisers. Siobhan Hyland, EDF Energy's policy and regulation man- ager, highlighted some key areas that have the potential to affect customers in terms of costs, benefits and compliance obligations and set a challenge for TPIs and suppliers to "leverage the best deal" for customers. To achieve this, it was agreed that more could be done to ensure that a high regard for transparency among ethical TPIs and suppliers translates into practical infor- mation-sharing between the two groups – though all present claimed already to be extremely transparent with customers about fees, commissions, etc. To this end, TPI delegates pinpointed smart metering as a key area of concern where they feel they have insufficient vis- ibility of supplier intentions to inform and advise their clients effectively. One delegate asked if B2B customers will effectively have to subsidise the rollout of domestic smart meters – an initiative which will cost EDF Energy alone in the region of £1.2 billion. He further questioned whether the B2B cost implication of such a move would be spread over the full five years of the national smart meter rollout, or was likely to be "front loaded". While there wasn't a ready answer for this query at the Talk Power session, EDF Energy representatives promised to follow up with clarification. A similar promise of news came in response to multiple calls for insight into supplier intentions around P272 – Ofgem's proposal to alter the balancing and settle- ment code for non-domestic users so that actual half-hourly consumption data is used for billing, rather than estimated consump- tion. TPIs wanted to know precisely when and how EDF Energy – and other suppliers – would transfer customers to the new set- tlement arrangements and how it will effect contract renewal processes. EDF Energy's TPI workshop finished with a series of interactive questions which sur- veyed the opinion of attendees on the likely evolution of the energy market, and their role within it, over the next five years. One question asked delegates how they expected TPI-supplier relationships to change, with the following results: • They will become more collaborative: 62 per cent. • They will become more competitive: 21 per cent. • No change: 17 per cent. In the light of this indication that TPIs have an appetite for more collaborative work- ing, Utility Week asked Rebecca Sedler, direc- tor of EDF Energy's B2B commercial, why working relationships between suppliers and TPIs had not been so strong in the past. "Because of the strong belief that the TPI business model has bred from supplier service failings – and because of industry failings," she replied. But now, as pressure mounts for all participants in the energy industry to simplify customer experience, Sedler hopes this "reticence to collabo- rate" can be overcome in order to maximise the value that TPIs offer for "niche" energy requirements. "There's a strong argument to say that the emergence of TPIs has been the result of ser- vice failings on the part of large suppliers – and as a result of complexity in our market," she allowed. "But I think when you look at that very complex regulatory landscape and at the large number of stakeholders involved in energy procurement decisions, you realise that having that intermediary, having that consultant, adds quite a niche service – so it's not just for troubleshooting where there are industry failings or service failings. It's offering guidance on these niche areas which may affect certain businesses." JG * P272 has now been superseded by P322, extending the deadline for transfer to April 2017. "[The comparison sector] is a valuable free service that helps consumers to save hundreds of millions a year" • Steve Weller, chief executive, Uswitch Rebecca Sedler, director of EDF Energy's B2B commercial