Ofgem requires energy suppliers to disclose third party costs paid to all non domestic energy consultants
12 August 2024 | 4 minutes
New regulatory obligations require energy suppliers to disclose Third Party Costs paid to all non-domestic energy consultants.
In April this year, Ofgem published its decision2 following a detailed Retail Market Review of the non-domestic energy market. A key part of this activity was to determine if the obligation to disclose Energy Supplier’s Third Party Costs (e.g. Broker commission) should be extended to all non-domestic customers, irrespective of size.
Ofgem has determined that customers must be made aware of any Third Party Costs payable to energy consultants for contracts signed on or after 1st October 2024.
What’s changing?
From 1st October 2024, Energy Suppliers will be required to disclose any Third Party Costs payable to energy consultants as part of their contract. This new requirement will apply to all customers, irrespective of size. The costs will be required to be provided within the contractual Principal Terms and when requested by customers. These charges must be displayed as a pence/KWh format.
There is an existing obligation to disclose Third Party Costs to Microbusiness Customers which is not impacted by this upcoming change. This requires suppliers to provide a total cost in £s payable to energy consultants over the duration of the contract and will remain in place for Microbusiness Customers.
In addition to the above changes, if you are a energy consultant serving “Small Business Consumers” you will need to be registered with a suitable Alternative Redress Scheme from later this year . This is subject to legislative approval, and not expected to be before 1st December 2024. More details can be found in Ofgem’s decision document.2
What will we be doing?
We will, as part of our contractual principal terms, be disclosing any relevant Third Party Costs to customers for contracts signed on or after 1st October 2024. We will also provide this if requested by the customer. This is in addition to the pre-existing requirement to disclose Third Party Costs to Microbusiness Customers and will be displayed in a pence/KWh format.
Do energy consultants have to do anything?
As the energy consultant you do not need to do anything to enable this change. However, it is important for you to be aware of the increased transparency in this area. To summarise, From 1st October 2024, all energy suppliers are required to publish any Third Party Costs payable to energy consultants under non-domestic energy supply contracts, irrespective of customer size. For any further information, you can find out more in Ofgem’s decision document.2
1 Third Party Costs This means any fees, commission or other consideration including a benefit of any kind, processed by the licensee and paid or made or due to be paid or made to the Third Party. 2 Non-domestic market review: decision | Ofgem
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