Energy brokers are paid a commission by the supplier, built into your unit rate. That is normal and there is no version of the market without it. What has changed is that you are now entitled to see the figure, and to take a complaint about a broker somewhere independent. Plenty of businesses still do not know either of those things, which is exactly why it is worth writing down.
The 30-second version
- Broker commission must be disclosed. Since October 2022 for microbusinesses, and in the principal terms of every non-domestic contract signed from October 2024.
- Your broker must belong to a redress scheme if you are a micro or small business. Suppliers are not allowed to use brokers who do not.
- Ofgem does not directly regulate brokers. It regulates suppliers, and reaches brokers through them. That limit matters.
- A letter of authority should let a broker ask questions, not sign contracts. Check the scope and the expiry.
- Ask three questions and you will learn almost everything about how your current broker operates.
On this page
What the rules actually say
Three changes matter, and they arrived separately.
| From | What changed | Who it covers |
|---|---|---|
| 1 Oct 2022 | Suppliers must disclose third party costs, including broker commission, on request | Microbusinesses |
| Dec 2022 | Suppliers may only agree contracts through brokers who belong to a qualifying dispute settlement scheme | Microbusinesses |
| 1 Oct 2024 | Broker fees must be shown in the contract's principal terms, and small businesses gained access to broker redress | All non-domestic customers |
The practical upshot: if you signed a non-domestic energy contract from October 2024 onwards, the broker's fee should be visible in the principal terms of that contract. Not buried, not available on request only, not a vague statement that commission may be payable. If you cannot find it, that is a reasonable thing to ask about.
The redress schemes are known as Qualifying Dispute Settlement Schemes. Two operate: the Energy Ombudsman and the Utilities Intermediaries Association. A micro or small business with a complaint about a broker can take it to whichever scheme that broker belongs to, free of charge, once the broker's own complaints process has run its course.
Where the rules stop
This part is usually left out, and you should know it.
Ofgem does not directly regulate energy brokers. It regulates suppliers, and reaches brokers indirectly by telling suppliers who they may and may not work with. That means Ofgem has no power to order a broker to repay commission it did not disclose. Businesses who have been overcharged historically have generally had to pursue it through the courts rather than through the regulator.
So the protections are real but narrower than people assume. They are strongest at the point of sale, where disclosure is required, and at the point of complaint, where a redress scheme exists. They are weakest in the middle, which is where doing your own checking still matters.
Worth saying plainly: we are a broker on energy, not a supplier. Your supply contract is with the energy supplier, so billing and supply questions go to them. The broker on our energy arrangements is Evolve Online Tech, which is registered with the Energy Ombudsman. We think a business should be told that without having to dig for it, which is rather the point of this article.
Letters of authority
A letter of authority is the document that lets a broker talk to suppliers on your behalf. Without one, suppliers will not discuss your account with anybody but you. It is a normal, necessary piece of paperwork, and it is also where the worst practice in this industry hides.
What a letter of authority should do: allow a broker to obtain your supply details, ask suppliers questions, and gather quotes for you.
What it should not do: commit you to anything. Check for these before signing one:
- Does it give authority to sign a contract on your behalf? It should not. Gathering quotes and entering contracts are different permissions, and the second should always come back to you.
- How long does it last? An open ended letter of authority is not in your interest. A defined period, often a few months, is reasonable.
- Can you withdraw it? You should be able to, at any time, in writing.
- Is it exclusive? Some letters of authority try to prevent you talking to anyone else. Think hard before accepting that.
- Which supplies does it cover? It should name the premises or meter points, not grant blanket authority over everything your business holds.
If a broker is reluctant to explain any of that, you have learned something useful.
How commission really works
Brokers are paid by the supplier, and the commission is normally built into the unit rate you pay. It is typically expressed as an uplift measured in pence or fractions of a penny per kWh.
That arrangement is not a scandal in itself. It is how the market is built, and a broker doing real work on your behalf deserves to be paid for it. Two things turn it into a problem:
- You cannot see it. If the uplift is not disclosed, you cannot weigh it against the price, and you have no way of telling a modest fee from an enormous one.
- It is applied inconsistently across the quotes you are shown. A larger uplift on one supplier's quote than another changes which option looks cheapest. The comparison stops being a comparison.
The fix for both is the same, and it is not complicated: see the number, on every option, before you decide. Then judge the total cost like you would judge any other quote.
What a good broker does
- Tells you what it is paid, in writing, before you sign. The amount, how it is charged, and what it adds to your rate.
- Applies it consistently across every option it shows you, so the comparison is honest.
- Uses a letter of authority that gathers quotes and nothing more, with a sensible expiry.
- Belongs to a redress scheme and tells you which one without being asked.
- Is clear about who your contract is actually with. The supplier, not the broker.
- Tells you when to do nothing. Sometimes your existing rate is good and the honest answer is to leave it alone.
- Diarises your renewal and comes to you with time to spare, rather than in the last fortnight when you have no leverage.
Three questions to ask yours
- "What commission are you earning on this contract, and what does it add to my unit rate?" A straight answer in pence per kWh is what you want. Hesitation, or an answer about how the market works rather than about your contract, tells you plenty.
- "Which redress scheme are you a member of?" It should be the Energy Ombudsman or the Utilities Intermediaries Association, and it should be answered immediately.
- "Can I see the letter of authority I signed, and when does it expire?" You are entitled to know what you authorised and for how long.
None of these are hostile questions. A broker operating properly will answer all three in a couple of minutes and think nothing of it.
Want a second opinion on what you are paying?
Send us your current contract and a recent bill. We will tell you what the rate looks like against the market, whether the commission is visible where it should be, and whether it is worth moving at all. If you are already on a good deal we will say so.