20 July 2006 | Paul Snell
A new code of practice designed to increase financial transparency between energy consultants and buyers has had a mixed response.
The Utilities Intermediaries Association (UIA) launched the guidelines this month to ensure buyers have confidence in using third-party intermediaries (TPIs).
John Hall, managing director of energy consultancy John Hall Associates, said: "Many buyers don't know what they are paying for and what they are paying the supplier. The value of commissions is not difficult to quantify, but easy to cover up."
Energywatch, the consumer watchdog, said the code was a good start in terms of clarity, but from a customer's point of view it would favour TPIs making a full disclosure of fees from suppliers.
Energy regulator Ofgem described it as the first step towards self-regulation of TPIs.
The code sets out standards for full UIA members who advise buyers. These include obtaining "letters of authority" from clients before seeking prices, agreeing with buyers how confidential data is managed, and clarity over recommendations of suppliers.
The code requires consultants to reveal whether they receive commission or rebates from suppliers, but does not require them to disclose the amounts. Rod Sinden, UIA operations director, said it was difficult to compare the fees and feared buyers wouldn't understand them.
In his second report to Parliament on the security of energy supply, secretary of state for trade and industry Alistair Darling said it is up to commercial operators to assess the merits of foreign supplies to reduce risks of disruption.
SMjul2006
