Regulatory Framework for Energy BrokersConsultation seeking views on introducing regulation for Third-Party Intermediaries (TPIs).

DESNZ has published a consultation seeking views on introducing regulation for Third-Party Intermediaries (TPIs). In recognition of issues identified within its previous call for evidence and fgem’s recent non-domestic market review it is proposing to impose a general authorisation regime.

This would require providers to comply with a set of general conditions which could apply universally.  The key policy objectives it intends to achieve by introducing a regulatory framework for TPIs include:

> Achievability of adequate consumer protections – ensuring fairness, equity, and consumer empowerment in interactions with TPIs, enabling informed decision-making, and protecting vulnerable consumers.

> Enforceability – to credibly deter TPIs from contravening their regulatory requirements, prevent harm from occurring, and provide a suitable remedy for customer harm if it does occur.

> Strategic fit with other government initiatives – seeking to achieve a coherent approach to regulation of TPIs across sectors where possible.

> Regulator and TPI capacity and capability – being flexible, to accommodate both existing and future TPI business
models whilst also being proportionate to the harm or risk of harm identified.

> Innovation and competition – not acting as a barrier to innovation and net zero or distorting competition.

The consultation also outlines which types of TPIs would come into scope of the chosen regulatory framework and seeks views on whether stakeholders agree, or if regulation of any other types of TPIs should be explored. The proposed scope splits potential parties into high priority, meaning firm choices for inclusion, and low priority, meaning potential for expanded inclusion depending on stakeholder views. The lists include:

> High priority: Energy brokers and consultants; price comparison websites/digital comparison tools; auto-switching; bill splitters; and sub-brokering.

> Low priority: Resellers; independent advanced meter data agents; aggregators for TPIs ; and artificial intelligence.

> Not in scope: Load controllers and Aggregators i.e., suppliers or load controllers.

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