If you’ve bought business energy through a broker, consultant or comparison service, you’ve dealt with what Ofgem calls a Third Party Intermediary, or TPI. Over the last few years, Ofgem has been tightening the rules around how these intermediaries operate. Getting your head around them is one of the most useful things you can do before your next renewal.
Why the rules exist
The business energy broker market ran with very little oversight for a long time. Brokers were typically paid commission by suppliers, built invisibly into the customer’s unit rate, and there was no requirement to tell the business paying it what that commission actually was.
Ofgem flagged this as a significant source of consumer harm. Smaller businesses, in particular, were least equipped to interrogate their own energy contracts and most likely to be quietly overcharged.
What the rules require
Ofgem’s framework for TPIs is built around one core principle: transparency. Intermediaries operating in the regulated space are expected to make clear how they’re being paid, so a business can understand what it’s paying for and to whom.
The direction of travel has been consistent. Clearer, more accessible disclosure of commission. A market where fees are visible before a contract is signed, rather than buried inside a unit rate for the length of it.
Why this matters more than it sounds
It’s tempting to treat “commission disclosure” as a bit of compliance box-ticking. For an SME, it has direct financial consequences.
A hidden, consumption-linked commission means the broker’s incentive is only loosely tied to getting you a good deal. It’s tied to how much energy you use and how long you stay on the contract. Once the fee becomes visible, and especially once it changes shape, the incentives shift with it. A flat, disclosed fee that only applies when you accept a deal ties the broker’s payment to an outcome you’re actually happy with.
What to ask any broker before signing
- Are you operating under Ofgem’s TPI framework, and can you confirm that in writing?
- How exactly are you paid? A flat fee, a percentage, a per-unit commission?
- Is that amount disclosed in writing before I commit to anything?
- Does the fee depend on how much energy I use, or on whether I actually accept a deal?
If any of those answers come back vague, take the vagueness itself as an answer.
Where the market is heading
Regulatory pressure, media scrutiny and growing SME awareness are all pushing the business energy broker market toward greater transparency. That’s good news for business owners. It also means the businesses that benefit soonest will be the ones asking the right questions now, rather than waiting for the market to change around them.
In short
Ofgem’s TPI rules exist because hidden commission was costing SMEs real money, for years, without their knowledge. Understanding the framework, and asking your broker to confirm how they comply with it, is one of the simplest ways to protect your business at every renewal.
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