Energy contracts to display broker fees under incoming Ofgem rules

Ofgem has agreed to introduce measures to keep energy brokers in check after businesses raised “serious concerns” about limited protections from suppliers.

It comes after the energy market regulator published a major review of the non-domestic gas and electricity market in July last year following months of complaints from businesses.

A coalition of business groups, including UKHospitality, had written to Ofgem calling for "immediate" action to stop hidden commission fees driving up bills.

In its latest update published today (5 April), Ofgem confirmed the phased introduction of measures to ensure greater transparency for businesses taking on new contracts.

From 1 July, Ofgem will be given more of a remit to challenge suppliers that treat non-domestic customers unfairly through the expansion of its standards of conduct and the introduction of a new supply licence.

Contracts for all non-domestic customers signed from 1 October must display any broker fees and make this information available on request.

From December, suppliers will also be required to implement suitable complaints processes and only work with brokers that are members of a redress scheme, such as the Energy Ombudsman and the Utilities Intermediaries Association (UIA).

These providers were previously only available to microbusiness consumers, but under the changes, any small business with less than 50 employees will be eligible for additional protections.

Tim Jarvis, director general for markets at Ofgem, said: “We’ll be speaking to businesses of all sizes as these rules come into force throughout this year to make sure they are being followed by suppliers.

“We’ll also continue to work with government, industry and consumer groups to see what else can be done to support non-domestic consumers.”

Kate Nicholls, chief executive of UKHospitality, added: “I’m very pleased that Ofgem has taken steps to enhance protections against unfair treatment by energy suppliers.

“UKHospitality and our members have been raising serious concerns about this issue for the past two years and this is a significant victory in our work to deliver a better energy market for hospitality businesses.

“I hope these measures go some way to mitigating these costs and protecting businesses, but I’d continue to urge energy suppliers to be proactive in supporting their business customers.”