14 December 2006 | Paul Snell
Energy consultancies will need to be more professional and properly accredited to help buyers manage their energy spend in the future.
This is the view of Chris Bowden, chief executive of Utilyx, the first energy risk management service to win accreditation from the Financial Services Authority.
He told SM: "Becoming authorised was not just wanted by us, but a necessity. It is likely that in the future advice on carbon trading won't be able to be given without authorisation."
FSA accreditation allows Utilyx not only to recommend options to buyers to manage their energy risk or when to buy energy, but to actually tell them.
Some consultancies told SM that buyers are not looking to be told what to do, but Bowden believes they want varying levels of service.
He also said energy consultancies needed to provide reassurance for buyers and dispel the image of "cowboys" in the market. He warned other consultancies that getting FSA approval required "a lot of patience, and a lot of money".
Purchasers saw the move as a positive step. Barry Leighton, head of procurement at Northumbrian Water, told SM that increased transparency would help buyers' confidence.
"The FSA authorisation has teeth. If [Utilyx] get something wrong there are serious penalties."
Utilyx also believes that the FSA backing will be important with growing financial legislation affecting business.
"I know of several companies that have already been audited over what they do to manage energy exposure," said Bowden. "From a senior management perspective, this accreditation gives them a lot of comfort that all systems are in place and have been verified."