The Energy Consultants Association (ECA) recently examined the RECCo Code of Practice (COP) proposed during the RECCo COP initiative.
The initial response sheds light on the crucial role played by brokers in facilitating cost-effective energy prices for customers and boosting switching rates.
This article delves into the ECA’s perspective on the RECCo COP, emphasising the need for enhancing service standards and transparency while critically evaluating the proposed COP.
RECCo Acknowledging Brokers’ Role
The ECA welcomes RECCo’s recognition of the significant contribution that brokers make in securing affordable energy prices for consumers.
The encouragement from RECCo regarding switching rates aligns with the ECA’s mission to drive industry improvements.
However, the ECA highlights potential areas in the RECCo COP, where value addition could be more effective.
A Different Lens: RECCo and Ofgem’s Direction
The ECA contrasts its perspective with the direction taken by RECCo and Ofgem. We argue that their approach may not fully capture the intricacies of the situation.
The ECA’s stance is grounded in the belief that a broader viewpoint is required.
Enhancing Switching Rates: A Fundamental Goal
In the realm of business energy, the ECA acknowledges that switching rates are suboptimal compared to other markets due to persistent structural challenges.
Instead of solely focusing on customer-led standards, the ECA believes that the industry should emphasise identifying barriers, unnecessary costs, and enhancing access to centralised data.
This, in turn, will promote better end value for customers and drive up switching rates.
Key Focus Areas: Switching, Fraud Reduction, and Data Access
To improve switching rates and customer outcomes, the ECA suggests concentrating on reducing fraud, enhancing data access, and decreasing the costs associated with accessing data.
For instance, the ECA raises concerns about the disproportionately high data costs from Electralink, while RECCo seeks consumption level assurances through its proposed Code of Practice.
Evidence-Based Approach: Addressing Complaints
While the ECA acknowledges pockets of complaints from business customers surrounding energy brokers, there remains a lack of hard evidence to support the number of credible complaints or indeed the cost of such “poor” behaviours.
The ECA asks what percentage of consultant led activity ends in an upheld complaint versus direct supplier complaint rates?
The Need for Tangible Evidence
Both Recco and Ofgem have failed and continue to fail to provide any clear evidence of such behaviour – and as a result the remains no clear reason to add further audit framework – most of which simply re-affirms existing legal responsibilities already on our members.
Potential Pitfalls of Increased Fee Disclosure
Highlighting potential repercussions, the ECA warns that further fee disclosure might inadvertently lead to market distortion and increased costs for end customers, ultimately hampering switching rates.
Supporting Competition: The Role of Energy Consultants
Energy consultants play a pivotal role in driving competition and reducing costs for end customers through increased switching.
The ECA contends that regulations or reforms that impede consultant access or lower switching rates could ultimately increase costs for consumers.
Call for Rigorous Evaluation
The ECA asserts that RECCo and Ofgem must undertake a comprehensive analysis of the economic impact of proposed reforms. Transparent evaluation by REECo is crucial to ensure that competition and switching rates are not compromised.
ECA’s Future Engagement
Prior to submitting a detailed response to the RECCo COP, the ECA will engage our members to gather insights and feedback.
Additionally, the ECA urges RECCo to provide independent legal advice validating the non-anticompetitive nature of the proposed reforms.
This request underscores the importance of considering potential consequences and market dynamics.
In summary, the ECA’s reaction to RECCo COP proposal serves as a testament to its resolute dedication to advancing industry benchmarks and fostering a transparent environment.
Acknowledging the paramount importance of optimal switching rates and duly appreciating the indispensable role played by energy consultants, the ECA champions a measured, evidence-driven methodology in shaping reforms.
This deliberate approach is guided by the overarching aim of not only benefiting consumers but also safeguarding the vitality of the energy consulting industry.
By advocating for meticulous assessment and thoughtful recalibration, the ECA paves the way for a more robust and equitable energy landscape.
The end goal remains steadfast: to harmonise consumer interests with the vitality of the energy consultant/broker community, thus underlining the ECA’s pivotal role an advocate for sustainable progress within the sector.