Inspired responds to Ofgem’s Third-Party Intermediaries market review
Ofgem's market review marks a step towards building a clearer picture of the dynamic TPI industry.
The UK government has set out its intention to appoint Ofgem as the regulator of Third-Party Intermediaries (TPIs) in the retail energy sector.
This would give Ofgem the power to set new rules, monitor and investigate companies, and ensure TPIs are authorised.
Building on this, Ofgem launched a review of the TPI sector to assess market structure and competition, identify potential distortions in behaviour and incentives, and understand how outcomes differ across consumer types.
Work to establish a TPI regulatory regime has begun, and this call for input demonstrates the depth and range of practical questions that must be resolved to create an effective and proportionate framework in a diverse market landscape.
We welcome the government’s intention to appoint Ofgem as the TPI regulator. With its established industry presence and existing oversight of suppliers, Ofgem is uniquely positioned to build an effective regulatory regime supported by appropriate supplier obligations.
We also welcome Ofgem’s commitment to deepening its understanding of the TPI industry through activities like this.
Kate Hughes, Commercial Director, Inspired Group
One of the key subjects to address is the cost of regulating the TPI sector.
The government’s approach would have Ofgem recover their regulatory costs primarily through annual fees payable by regulated TPIs, a position Ofgem has echoed.
As part of the response, Inspired has provided supporting documentation to outline a hybrid, activity-based and risk-weighted funding model.
Kate continued: “Inspired responded to the 2024 government consultation on regulating TPIs. Our stance remains that an effective and enforceable regulatory scheme must be rooted in the requirements of different consumer segments, aligned with supplier obligations, and cognisant of the established role of contract law.
“We look forward to examining further detail in due course, and to continue constructive engagement with Ofgem as the design of the regulatory regime takes form.”
Inspired’s full response, along with our recommendations for an approach to funding the TPI regulatory regime, can be viewed below.
Main header image credit: Alex Mackey, Inspired’s Estate Intensive team.
