For years, the UK’s business energy market has relied on a trust system. Energy brokers, or Third Party Intermediaries (TPIs), have been expected to “self-police.” However, practices that sometimes caused confusion or unintended outcomes became the norm for some businesses.
Now, that’s about to change. After years of debate, the government has confirmed that Ofgem will become the regulator for Third-Party Intermediaries (TPIs). These are the energy brokers and price comparison services that help businesses navigate complex utility contracts.
The move is about restoring trust in how UK businesses buy energy. While many TPIs operate responsibly and provide valuable services, there are still some who have engaged in certain practices that have occasionally caused challenges for businesses. For reputable brokers, it’s a long-awaited opportunity to prove what honest consultancy should look like.
At Utility Bidder, we welcome regulation that raises the bar for all. Fair, transparent rules that protect businesses and reward integrity are essential to building a trusted and competitive energy market.
The Problem: Guidance Turned into Guesswork
Energy brokers once aimed to simplify the process of buying business gas and electricity. In reality, a lack of oversight opened the door to inconsistent practices, often driven by commission incentives that encouraged a lack of transparency.
Thousands of businesses, especially SMEs and public sector organisations, have reported:
- Complex pricing structure
- Sales approaches that can be confusing
- Contracts with limited flexibility
- Unclear comparisons between suppliers
It’s a setup that��s eroded trust and inflated costs. As the government admitted, “Ofgem does not currently regulate TPIs, meaning we cannot intervene when they fail to meet the standards the non-domestic sector has a right to expect.” This lack of regulation has left non domestic customers, including SMEs and public sector organisations, without adequate consumer protection against unfair practices.
Put simply, self-regulation has had limitations. The system has rewarded opacity and punished integrity, but the incoming Ofgem regulation promises to change that balance of power.
Ofgem: What’s Actually Happening
The government will grant Ofgem statutory powers to regulate TPIs for the first time. This will include authority to:
- Create and enforce conduct and transparency rules.
- Require all TPIs to register and be authorised before operating.
- Oversee complaint handling and Alternative Dispute Resolution (ADR) schemes.
- Impose penalties or exclusion for firms that fail to meet standards.
The framework is expected to build on principles already outlined in the previous industry Code of Practice developed by the Retail Energy Code Company (RECCo). Those principles: treating customers fairly, ensuring transparency, preventing misrepresentation and requiring brokers to work alongside ADR-registered suppliers remain central to what is now being finalised.
For context, there were previously two competing codes of practice: one from RECCo and another from the Department for Energy Security and Net Zero (DESNZ). The RECCo version had gained stronger industry traction before progress stalled.
Why It Didn’t Work Before
The original RECCo Code of Practice was due to go live in May on 2025 but was ultimately vetoed. Ofgem, at that time, lacked the legal power to enforce it. The code was therefore voluntary, with fewer mechanisms to ensure compliance.
Extensive time and work went into developing the original code, which included six core principles aimed at fairness, transparency, and consumer protection. While it never became mandatory, this groundwork is expected to inform the new regulatory framework, providing a solid foundation for Ofgem’s upcoming rules.
Why This Time Is Different
The difference now is authority. The government has formally given Ofgem enforcement powers, ending the reliance on voluntary self-regulation. TPI regulation will fundamentally change how brokers operate and interact with energy suppliers and the supplier community, introducing direct oversight and new compliance requirements.
While details are still emerging, early indications suggest the new regime may include:
- TPIs being regulated directly, not just monitored via energy suppliers.
- Mandatory registration and “fit and proper” checks as part of market entry.
- Enforcement powers for Ofgem to fine, suspend, or ban non-compliant brokers.
- Stronger requirements around ADR participation and complaints handling.
If these measures go ahead, this will shift TPIs from being loosely supervised intermediaries to fully accountable, regulated entities. Thus, the outcome could be higher professional standards, greater business confidence in brokered energy deals, and a healthier retail energy market overall.
What This Means for Businesses
For business customers, the impact should be positive:
- Transparency: Brokers will have to clearly disclose how they are paid and what commission is included in your energy deal, including transparency in energy prices.
- Trust: You will know that any authorised broker has met Ofgem’s registration and compliance requirements.
- Protection: Dispute resolution and redress will be standardised, with independent oversight.
- Clarity: Market rules will be consistent, reducing the chance of misinformation or hidden costs.
- Competition: The focus shifts from sales tactics to value, empowering brokers who act in their clients’ best interests.
- Stronger protections and fair treatment: All energy consumers, including vulnerable consumers and micro-businesses, will benefit from stronger protections and fair treatment, ensuring their rights are safeguarded and their interests are prioritised throughout the process.
Auto switching services will also be regulated to ensure transparency in energy prices, fair treatment, and support for energy efficiency measures, further protecting the customer’s interests.
Ultimately, this should mean better service and fairer outcomes for businesses and energy consumers across the UK.
The Pros and Cons of Regulation
Like any major reform, regulation comes with trade-offs.
The positives:
- Stronger protection and clearer accountability for customers.
- A more level playing field for reputable brokers.
- Greater confidence in the integrity of the TPI market.
Potential challenges:
- Smaller brokers may face higher compliance costs.
- Ofgem’s enforcement resources will be tested as the regime takes shape.
- Excessive regulation could slow innovation if not carefully balanced.
The goal should be protection without suffocation, ideally a framework that ensures high standards across the market without discouraging competition or efficiency.
The Industry View – Utility Bidder’s Stance
Utility Bidder has long believed that consistent, enforceable regulation is essential for a healthy energy market. We fully support Ofgem’s new role, provided the rules are fair, proportionate, and built with all parties in mind. That includes brokers, suppliers, and customers alike.
As an early member of the ECA, we have always operated transparently and in line with best-practice principles, ensuring every client understands their options, their contracts, and their costs. Regulation that rewards this approach is a step in the right direction for everyone.
What Businesses Should Do Now
While the legislative process continues, businesses can prepare by working only with brokers that already uphold the standards regulation will enforce:
- Check ADR membership – your broker should already be part of an approved dispute resolution scheme.
- Ask about commissions – a reputable broker will always be clear about fees.
- Look for transparency and accreditation – choose firms with a strong compliance record and proven customer service.
- Consider brokers signed up to the ECA – although not a regulatory requirement, any broker accepted as a member of the Energy Consultants Association (ECA) must demonstrate that they operate in the customer’s best interest through ethical conduct and high service standards.
As Ofgem’s new framework takes shape through 2026, these steps will help ensure your business energy procurement remains fair and secure.
At Utility Bidder, we will continue to lead by example, combining award-winning service with the full transparency and commitment that businesses need to protect their bottom line.
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