The government committed to consult on regulating third-party intermediaries (TPIs) in the Energy White Paper, with a view to ensuring the regulatory framework adequately covers the wider market.
A new call for evidence represents the start of that consultation process.
TPIs, which include a wide range of business models that typically sit between customers and the regulated entities in the energy market, are increasingly used by domestic and business customers to engage in the market.
TPIs used mostly by domestic customers include price comparison websites, auto-switchers and auto-recommendation services, and bill-splitters (who may consolidate several services, including energy supply, into a single bill split amongst multiple bill-payers), while business customers use TPIs such as brokers to support with energy procurement and contract negotiation.
New types of TPI are emerging across the energy system as it evolves in particular, aggregators and other organisations performing a ‘load controller’ role who can control or impact customer energy usage remotely using communication networks.
While the government recognises that TPIs provide valuable services to customers and can support net-zero ambitions by providing services that enable customers to engage in the retail market in a way that supports decarbonisation.
However, they largely operate outside the scope of the current retail energy market regulatory framework, and in an outline for the consultation, Department of Business, Energy and Industrial Strategy (BEIS) states their desire to be ‘confident that customers are adequately protected when using their services.’
When introducing the consultation, BEIS goes on to state that they have ‘some evidence’ that TPIs’ activities ‘could lead to customer harm (or risk of harm) and energy system risks if insufficient protections are in place’, but ‘do not have a full understanding of the range of possible harms, or their frequency or severity.’
As a result, evidence and views of customer harm (and/or risk of harm) from TPIs’ activities, as well as where TPIs may present energy system risks, is sought as part of this call for evidence.
The call for evidence also sets out information on the existing regulatory arrangements for TPIs (including initiatives such as voluntary codes of practice) and seeks views to inform the design of any future regulatory intervention if required.
This consultation closes at
More information about this call for evidence and how to take part is available on the UK Government website.
