Standing Charge vs No Standing Charge

Richie-from-the-Boro · 5 April 2013 at 1:35AM

Nada666 wrote: »

As has already been mentioned, this is a far right-wing policy. To save people like you (edit: I mean, modest, average, and higher users) one, two, three pounds per year at most others have to pay one or two HUNDRED pounds extra. The 'subsidies' are not equivocal for the two groups. (Edit: it isn't one household pays one hundred pounds extra so another household saves one hundred pounds - there are fifty or one hundred households paying £1 or 50p extra to save that other household one hundred pounds.) Plus, of course, many of the higher consuming households can themselves also receive a break over a summer quarter.

You are correct - it is fairer to charge everyone a larger sum. But where do you draw the line? There are other subsidies a damn sight higher that people pay.

1) Let's ban interest free repayments. If you don't pay within seven days then introduce late penalty fees immediately and interest for the repayment period.
2) Let's ban subsidised prepayment meter tariffs.
3) Let's ban optional meter change charges and one flat fee charges - ban companies from waiving charges, or averaging charges
4) Let's ban all the 'vulnerable' household subsidies - by definition the only households that receive subsidies (from other customers) are households that qualify to receive an extra basic income in the first place.
5) Let's ban cashback. £60, £101 windfalls are orders of magnitude* more significant than the two-tier costs.
6) Let's not charge such a ridiculously low standing charge in the first place - clearly, to be fair, it should be thirty or forty pounds per month, not thirteen (taking Co-op price as average).

Of course, you may agree that this should take place. The thing about two-tier tariffs is the cost is, surely, pretty small and one of the last things that needs changed. The low users still have to pay two to three times per kWh what others are charged. They still mostly cover their determined standing charges - it is essentially the kWhs that they receive at a bargain rate. Plus they have the flexibility to use more when they need more (a flexibility that is lost with tariffs such as Ebico's).

Most people, I would think, who pause to think realise that the two-tier tariff is a reasonable compromise between the competing demands. Most people, I would hope, who pay £1200, £1300 per year would be happy to sacrifice the opportunity to pay £2.50 less to prevent someone else paying an extra £250 even before they have switched a single light on.

Of course, I may well be wrong. It is 2013. This is money saving expert. There is no such thing as society.

* orders of magnitude? clearly not true. I'll leave that hyperbole there anyway

- me ? right-wing ?, er ok !, that'll be a first time accusation on MSE
- all vulnerable' household subsidies are excluded as pre-agreed

"Of course, I may well be wrong", - ?

Cardew · 5 April 2013 at 9:47AM

I certainly agree with Nada666's views above for 'vunerable' groups.

I even have some sympathy for, say, someone who only has gas for cooking and will face a huge rise. They can of course switch to Ebico for gas only.

Some post on MSE that they switch off gas for the 2 'summer' quarters. Will they switch to Ebico for that period, and back again for winter(collecting cashback)?

Richie -from-the-Boro There are always going to be costs so the supplier either loses money on the tariff [that will ever be allowed to happen]

I assume 'ever' is a typo and should read 'never'?

I have an annex with separate gas and electricity supplies that I use very little. In the past, when with BG, they gave an Xpence per day discount for both dual fuel and payment by DD and I was actually making a 'profit' for 'allowing' them to supply the property.;)

Indeed if I could have brought myself to use Npower, I would have been handsomely in profit with their £100 cashback after a year.

I am presently with Ebico for this annex, whilst I can't plead poverty, I hope they can keep their present charging structure.

Nada666 · 5 April 2013 at 10:02AM

Richie-from-the-Boro wrote: »

- me ? right-wing ?, er ok !, that'll be a first time accusation on MSE

Richie-from-the-Boro wrote: »

This will result in cross subsidy of me paying for someone else, I'd rather you pay your own costs thanks !.

Yup, a very progressive view being extolled there

I don't know, I could have sworn it was you a few days ago mumbling something about SSE's increase of their standing charges. I must have completely misread your post - clearly you were praising SSE for using Ofgem as a smokescreen to double their charges and feel they should increase them even further.

Richie-from-the-Boro · 5 April 2013 at 2:19PM

Cardew wrote: »

I certainly agree with Nada666's views above for 'vunerable' groups.

I even have some sympathy for, say, someone who only has gas for cooking and will face a huge rise. They can of course switch to Ebico for gas only.

Some post on MSE that they switch off gas for the 2 'summer' quarters. Will they switch to Ebico for that period, and back again for winter(collecting cashback)?

I assume 'ever' is a typo and should read 'never'?

I have an annex with separate gas and electricity supplies that I use very little. In the past, when with BG, they gave an Xpence per day discount for both dual fuel and payment by DD and I was actually making a 'profit' for 'allowing' them to supply the property.;)

Indeed if I could have brought myself to use Npower, I would have been handsomely in profit with their £100 cashback after a year.

I am presently with Ebico for this annex, whilst I can't plead poverty, I hope they can keep their present charging structure.

HiYa Cardew, yes 'ever' was a typo that should read never.

My understanding is Ebico are not in the big 6, not part of the consultation agreement, and as yet I'm unclear as to how those smaller players are to be allowed to find a 'workaround' or otherwise. TBH their financial model and % of the market is so small in the grand scheme of things I see no reason for GOV to impose any change whatsoever on them. On a personal level I have no issues whatsoever with 'cross subsidy' by individual small suppliers such as Ebico et-al and if they were allowed to continue to function with no changes whatsoever it would have no influence at all on the overall market. I do however, as stated, have an issue with 'cross subsidy' with the big 6 suppliers.

Richie-from-the-Boro · 5 April 2013 at 2:39PM

Nada666 wrote: »

Yup, a very progressive view being extolled there

I don't know, I could have sworn it was you a few days ago mumbling something about SSE's increase of their standing charges. I must have completely misread your post - clearly you were praising SSE for using Ofgem as a smokescreen to double their charges and feel they should increase them even further.

I could have sworn it was you a few days ago mumbling something about

clearly you were praising SSE for using Ofgem as a smokescreen to double their charges and feel they should increase them even further

Let's ban all the 'vulnerable' household subsidies

Of course, I may well be wrong

I wondered why it was a personalised attack, I haven't one clue what you are talking about. I wasn't praising, I was observing and making the criticism that they've spent a year getting their 'standing charges' raised with the collusion of Ofgem and how being 'under the duvet' with GOV means they will get away with it - so quite the opposite of what you thought you read. I stand for the bringing down of the smokescreen of the big six on tariff comparisons and an imposed arbitrary Ofgem lowering by nett nett % across the board by any means possible the (1) bills of consumers and the (2) profits of the big six. Vulnerable ? - I've covered that several times with 'all vulnerable' household subsidies are excluded as pre-agreed'.

Fire_Fox · 5 April 2013 at 4:55PM

Richie-from-the-Boro wrote: »

Question for the low user group :

If the standing charge is about "maintenance, reading the meter, keeping supplies connected to the network and making sure the meter is safe" then the cost of loss to the provider for your 'low use' is precisely the same as anyone on these Islands regardless of their use.

Put another way. in the circumstances of an abnormally low consumption a supplier may have some scope for a reduction in costs of ,say, billing and metering. They will never be able to reduce these to a zero. There are always going to be costs so the supplier either loses money on the tariff [that will ever be allowed to happen] or will smear the loss over over the higher use consumers. This will result in cross subsidy of me paying for someone else, I'd rather you pay your own costs thanks !.

Suppliers only have to read the meters every two years, like many modern flats we are electric only (no scary gas supply/ meter to maintain) with meters locked away in an inaccessible basement so officially read only the bare minimum. Frankly it would be cheaper for some of us to pay for a brand new meter at £70 every two years than a standing charge. No doubt there is some maintenance going on behind the scenes, but they aren't exactly digging the roads up every few years.

Singletons already subsidise larger households in a huge number of areas, from healthcare and schooling to the numerous means tested benefits only available to those who breed, to the reduced range of services we get via council tax where I live (eg. no doorstep recycling three years after it became law, no forums or surgeries to raise this with the council as a group).

I assume you'd rather very low users remained deeply in fuel poverty and get into debt? That is the reason some of us use no heating and little hot water, not because we are tightwads but because we actually do have that little disposable income. What is a drop in the ocean to you is a huge percentage of the disposable income of some on ESA, JSA or a part time job (I can't work full time due to my health).

Think about it: when was the last time you heard politicians banging on about groups other than hard working families and pensioners? To be classed as vulnerable you generally have to be elderly or have young children, oh look it's those same two groups. Too many small, low income households fall through the cracks of support, we try to help ourselves by being responsible with our energy use and get stung there too.

Richie-from-the-Boro · 5 April 2013 at 6:44PM

"Vulnerable ? - I've covered that now more than several times [+ 1 here] with the comment that 'all vulnerable' household subsidies are excluded as pre-agreed'." I don't make the criteria for the definition of vulnerable, and I assume neither do you, getting away from emotional amphigory and down to facts the current definition states :

10% of its income on all fuel use and to heat its home to an adequate standard of warmth. In England, this is defined as 21C in the living room and 18C in other occupied rooms.

Neither Nada666 or Fire Fox know me, my age, gender, economic group, marital status, ability or disability , etc but are happy to make personal accusations about my circumstances of which they know absolutely zilch. Why does my preference for getting 99% of the energy market away from the 'regional differences' smokescreen the big 6 have forever used as a deliberately 'introduced chaos' in the comparison sites and onto the simplicity of wholly flat national tariffs disturb people so much. Those actually read what's written, will see that in #39 I challenged E.ON Company Representative: Malc 03-04-2013, 10:59 AM on his assertion that their reasons for the standing charge were 'flaky' and outside the remit of the current agreement in the first instance.

The point of #39 is I don't believe they should have any standing charge at all as "maintenance, reading the meter, keeping supplies connected to the network and making sure the meter is safe" are all areas of influence within their control and their costs should be moderated a long way down, long before any standing charge is applied and even then when applied should be cost neutral.

If the standing charge is about "maintenance, reading the meter, keeping supplies connected to the network and making sure the meter is safe" then the cost of loss to the provider for your 'low use' is precisely the same as anyone on these Islands regardless of their use.

Put another way. in the circumstances of an abnormally low consumption a supplier may have some scope for a reduction in costs of ,say, billing and metering. They will never be able to reduce these to a zero. There are always going to be costs so the supplier either loses money on the tariff [that will never be allowed to happen] or will smear the loss over over the higher use consumers. This will result in cross subsidy of me paying for someone else, I'd rather you pay your own costs thanks !.

Nada666 · 5 April 2013 at 7:37PM

What personal accusations? Who is discussing your circumstances?

And yet, again, you finish with "This will result in cross subsidy of me paying for someone else, I'd rather you pay your own costs thanks!" And you wonder why one would point out the irony? (Sorry, I thought you were disparaging Atos with your avatar, not celebrating them.)

Again - you are saying a small subsidy of a fraction of a percent of a large number of customers' bills is totally unacceptable to avoid another customer's bill being raised hundreds of percent. You are saying someone who spends £1200, £1300, £1400 should not have to spend an extra pound or two to save someone else hundreds of pounds. !!!! the poor, !!!! those on a tight budget, everyone has to pay their own way. And you claim that that is not right-wing? Of course it is not unfair, arithmetically speaking. But I cannot fathom why you (considering your avatar and signature) are standing up for such a brutal and hard-nosed policy.

And you seem to suggest you want to ban standing charges altogether. Really? You think it is fairer for a disabled person who feels the cold to be forced to pay a tier 1 rate for every single kWh they use - disabled people should subsidise the young and fit who don't (yet) feel the cold. You do not believe that standing charges should be capped - the more you use, the more you pay.

Again, I do not understand your objection or your contradictions.

Cardew · 5 April 2013 at 8:01PM

Surely there is no 'one size fits all solution'.

Any solution that is fair to the 'poor' with low consumption, also works in favour of the 'rich' with one or more holiday homes - or even in my case an annex.

It seems to me that the fairest solution - albeit not perfect - would be for all companies to adopt the Ebico principle of a flat rate for each kWh of gas and electricity consumed.

Richie-from-the-Boro · 5 April 2013 at 10:41PM

#48 - "simplicity of wholly flat national tariffs"
#48 - "when applied should be cost neutral"
#45 - "I have an issue with 'cross subsidy' with the big 6 suppliers"
#46 - "bringing down of the smokescreen of the big six on tariff comparisons"

The vulnerable as I stated in #48 are those who spend 10% of their income on all fuel use and to heat its home to an adequate standard of warmth. In England, this is defined as 21C in the living room and 18C in other occupied rooms. Nada666 conveniently and continually swaps the word vulnerable which I have used for words I have not used such as poor & disabled.

Now either people are vulnerable under that legal means tested definition, or they are not. It matters not whether they are pensioners, catholics, disabled, ethnicity specific, unemployed, or an able bodied fit young couple in their 20's both fully employed and hard working. Either they have jumped through the means tested legislative 'vulnerable' hoop or not. If they have not passed the 'vulnerable' test they are not poor in legislation terms and not poor in my terms. There are millions of wealthy disabled pensioners who are per the above test capable of paying their own costs. So vulnerable in this context means what it means .. .. fuel poor.

Reducing the width [number] of tariffs whilst welcome in my opinion still leaves a huge array of complex tariffs on offer, making it virtually impossible for the average consumer to identify and choose the best deal, this is evidenced by the sheer volume of posts on the subject in only one week to this forum. Reducing the number of tariffs is not enough, its the complexity of each tariff that needs simplifying, making the standing charge a cost neutral wholly flat national figure would along with clause 6 go a long way to allowing any customer with any preference to find a cheaper if not cheapest simplified tariff.

The new clause 6 will go a long way to meet the needs of the non-vulnerable, but as Cardew says its a complex and difficult to 'balance' set of conflicting needs. Some of the worst hit of course have never been mentioned in this thread. Those off-grid gas & oil are paying crippling prices and the GOV claim there have no concerns that cartels might be at work, or that there's any lack of competition in the market.

Standing Charge vs No Standing Charge

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