No standing charge in summer?

babykitten

I've been thinking about standing charges recently. My gas and electricity usage is very low indeed. Partly because I live alone and partly because I was switching off unused lights etc. when it wasn't as fashionable as it is now. In fact, one guy who quoted me didn't really believe I used as little as I did. They probably think I'm fiddling the meter, but I'm just really frugal.

Anyway, what's to stop me switching to no standing charge tariffs for gas and electricity in the summer months when the heating, lighting etc is seldom used and then switching to the standing charge tariffs in time for winter?

At the moment I am on no standing charge tariffs throughout the year, because my calculations showed that it would be significantly cheaper this way, but I can't help but think I could save even more by going onto the standing charge tariff in the winter when my gas and electricity usage spikes.

Comments?

Maybe I'll do a calculation and return with some figures...

Quentin

If you do the standing charge tariff v no standing charge calculations, you see there is no difference once you have used the first tier expensive units in a no standing charge tariff (which compensate for there being no standing charge).

So you may as well be on no standing charge throughout.

Premier_2

Do the calulation and let us know which supplier saves you any money by paying a standard charge when you exceed their tier 1 limit.

i.e. why bother paying a separate standing charge? If you exceed tier 1 limit you'll probably end up paying the same, if you use less than tier 1 limit you'll probably save money when opting for a no standing charge tariff.

I've obviously not compared all suppliers and tariffs but that's what I've always found, so I'd be interested if you find something different
(excludes nPower as their sculpting is too difficult for simple me to compare)

Farway

If you use so little you could check out Ebico, no standing charge or tiers etc, so the calculation is easy

I use them because by the sound of it I have similar use to you, and find no frills a God send

babykitten

Right, I see what you're saying.

Essentially, it's possible to save money on no standing charge if usage is low.

But it's generally not possible to save money on higher usage WITH a standing charge because standing charge and no standing charge will work out the same?

I'm not sure I accept that as gospel however. Because there must be some very high users who would save a great deal by being on standing charge because of the cheaper units.

I'll rattle up a spreadsheet with my supplier's current tariffs...

Quentin

babykitten wrote: »

there must be some very high users who would save a great deal by being on standing charge because of the cheaper units.

If using the same tariffs from the same company, then no matter how many units you use, you pay the same total. Standing charge units are the same cost as the second tier units for the no standing charge tariff.

babykitten

Quentin wrote: »

If using the same tariffs from the same company, then no matter how many units you use, you pay the same total. Standing charge units are the same cost as the second tier units for the no standing charge tariff.

But the standing charge is a single pence fee charged per day, not per unit. The units are cheaper.

So there must be a point of higher usage where a standing charge tariff is cheaper than a no standing charge tariff surely?

Quentin

No.

The units for standing charge customers are the same price as the no standing charge second tier units.

No standing charge customers pay the same price as standing charge customers once they have used their more expensive requirement of first tier units.

Premier_2

babykitten wrote: »

But the standing charge is a single pence fee charged per day, not per unit. The units are cheaper.

So there must be a point of higher usage where a standing charge tariff is cheaper than a no standing charge tariff surely?

Standing charges are usually charged per quarter. They are often expressed per day for ease of comparison, are are charged pro rata for any billing period that is not a quarter.

If you take the difference between the tier 1 unit price and the tier 2 unit price, then multiply that by the amount of units that are charged at tier 1 level per quarter I always find it equals the standing charge per quarter. (or take the daily standing charge & multiply by 91.25)

Teir 2 unit prices always seem to be the standard unit price for the equivilent standing charge tariff, so no matter how much is used, once the teir 1 level is exceeded (the premium being used to recover the standing charge that would otherwise apply), then all units are charged at the same unit price irrespective of whether it's a standing charge tariff or not.

Let us know if you find a supplier/tariff that doesn't follow this basis.

babykitten

OK, here's the tariff details from my supplier (Atlantic). The table didn't post well...

Go to http://www.atlanticeg.co.uk/ForYourHome/OurPrices.aspx and enter a postcode of "g1 1aa" which is a fake (hopefully) Glasgow postcode. This will give you my prices without me revealing my real postcode. I can confirm that the prices are the same as in my postcode.

My annual usage in kWh of gas and electricity last year was:

Gas 12572 kWh
Electricity 1559 kWh

For the sake of argument, I'll assume that the usage is constant throughout the year and so one quarter is:

Gas 3143
Electricity 389.75

The costs (inc. VAT) for this hypothetical quarter would be:

Gas SC = (91*0.1403) + (3143*0.0341) = £119.93
Gas NSC = (1143*0.0446) + (2000*0.0337) = £118.37

Electricity SC = (91*0.1646) + (389.75*0.1278) = £64.79
Electricity NSC = (225*0.1934) + (164.75*0.1278) = £64.57

OK, so both cases are very slightly cheaper WITHOUT a standing charge with my low usage.

Lets multiply the usage by 3, which is quite feasible for multi-occupancy homes or folk who like the heating away up:

Gas 9429
Electricity 1169.25

Gas SC = (91*0.1403) + (9429*0.0341) = £334.30
Gas NSC = (1143*0.0446) + (8286*0.0337) = £330.22

Electricity SC = (91*0.1646) + (1169.25*0.1278) = £164.41
Electricity NSC = (225*0.1934) + (944.25*0.1278) = £164.19

OK, this is getting surprising, because it seems that no matter what I do no standing charge is always cheaper. Here's calculation where I have multiplied my usage by 10, then by 100, then by 10000 and every time no standing charge is cheaper. The last calculation is to show an extremely low usage and how it is much cheaper than having a standard charge.

10x my usage:
Gas SC = (91*0.1403) + (31430*0.0341) = £1084.53
Gas NSC = (1143*0.0446) + (30287*0.0337) = £1071.65

Electricity SC = (91*0.1646) + (3897.5*0.1278) = £513.08
Electricity NSC = (225*0.1934) + (3672.5*0.1278) = £512.86

100x my usage:
Gas SC = (91*0.1403) + (314300*0.0341) = £10730.40
Gas NSC = (1143*0.0446) + (313157*0.0337) = £10604.37

Electricity SC = (91*0.1646) + (38975*0.1278) = £4995.98
Electricity NSC = (225*0.1934) + (38750*0.1278) = £4995.76

10000x my usage:
Gas SC = (91*0.1403) + (31430000*0.0341) = £1071775.77
Gas NSC = (1143*0.0446) + (31428857*0.0337) = £1059203.46

Electricity SC = (91*0.1646) + (3897500*0.1278) = £498115.48
Electricity NSC = (225*0.1934) + (3897275*0.1278) = £498115.26


A tenth of my usage:
Gas SC = (91*0.1403) + (314.3*0.0341) = £23.48
Gas NSC = (314.3*0.0446) + (0*0.0337) = £14.02

Electricity SC = (91*0.1646) + (38.975*0.1278) = £19.96
Electricity NSC = (38.975*0.1934) + (0*0.1278) = £7.54

I'm very surprised that in ALL cases, no standing charge, with my supplier is cheaper, even going up to some quite ridiculous usage levels. Can anyone see any flaws in my arithmetic?

Also, my savings don't look much with the hypothetical equal quarters, but of course my usage is very much reduced in summer, so in winter I make a tiny saving by being no standing charge, but in summer I am probably making a much more significant saving.

Please point out any flaws in my arithmetic.

In short, I very much benefit in summer due to having no standing charge, but surprisingly I also benefit (in the tiniest of ways) in winter too. So I'm as well being no standing charge all year. I was expecting there to be some cut-off point of high usage where having the no standing charge would be much more expensive.

Edit: I've just checked my bills and my method of calculation above seems to be correct. Just need to check the arithmetic now. I'm making up a spreadsheet to allow instant results...

Premier_2

You are simply amplifying some rounding errors (which may or may not apply in reality).
Look at the non-vat rate. e.g. 13.36p plus VAT is 14.028p (which has been rounded to 14.03p)


If the case of electricity you are talking of a difference of 22p based on a £500k bill.

You've amplified the gas bill to over £1m - you can't have this tariff with that type of consumption.

However, even using your figures it shows you are never worse off on a nsc compared to a sc tariff, no matter what extremes you take it to. So why ever choose a sc tariff? Point proven?

(strangely, the nsc gas tier 2 rate is very slightly less than the standard unit price of the sc tariff as well and the maximum premium, ex vat, of tier 1 is just £11.43 compared to the sc of £12.191 per quarter)