No Standing Charge!!!!!

Gina63

The tariff we were on had no standing charge until last month and standing charge was added to our gas and electricity bill - no forewarning was made that this was happening and it has added about £180 to our bills. When I enquired as to why this was happening I was told they were made to do it by the government!!!! can anybody explain this to me?:mad::(

ilikewatch

Gina63 wrote: »

The tariff we were on had no standing charge until last month and standing charge was added to our gas and electricity bill - no forewarning was made that this was happening and it has added about £180 to our bills. When I enquired as to why this was happening I was told they were made to do it by the government!!!! can anybody explain this to me?:mad::(

Who is your supplier? SSE have published a good explanation for their introduction of standing charges accross the board, - your suppliers reasons will probably be similair:

http://www.sse.com/PressReleases/2012/EnergyPricesOct2012/

Cardew

Welcome to the forum.

Is that with E-On?

The Government appointed Regulator(Ofgem) wants simpler tariffs as apparently many people cannot understand the Tier system.
So E-On have started to put all their new customers on a Daily Standing Charge(DSC) and those on fixed/capped tariffs will also move to a DSC tariff when their term expires.

No doubt other companies will do the same.

However you won't be paying £180 more as you now won't be paying the higher tier1 rates. For most customers it will work out roughly the same, but low consumption customers will pay more

dogshome

On all Gas/Elec supplies the customer pays a Service Charge, which is collected in one of two ways.
1) A Daily Charge tariff - which is what your supplier seems to have changed over to
2) An No Standing Charge tariff, (NSC) on which fixed number of Kwh per Annum are charged at a higher price - which it appears you were on previously
The annual cost of either method generally works out to be about. the same.

However, the supplier cannot change the the billing method midway through the life of an agreed tariff, unless that is you are on the suppliers 'Standard' tariff, and even then you should be pre-notified

It's possible that you have come to the end of the agreed term of the tariff you were on, and the supplier, as all suppliers do in these circumstances, has moved you onto their Standard tariff - Take a look at the name of the tariff on this latest bill and compare with that on earlier bills - but once again you should have been pre-notified.

If it is the case you are now on a Standard tariff - Get your annaul Kwh consumption figures into the Switch sites and find a better deal

yangptangkipperbang

If nothing else, this thread shows the wonderful "pricing by confusion" system which bedevils our energy supply industry in this country !

NXV839

NSC tariffs often have a hidden standing charge as explained above. It sounds like your company have announced a separate standing charge to comply with clearer pricing guidelines but it shouldn't have dramatically increased your prices. The price hike is likely to be down to something else. Were you previously in debt and they have altered your tariff to make up for it? Has your contract come to an end and you've been put on a new tariff? Have the price rises hit your area harder than others? I'd look into all of these other areas as its more likely to be that than the standing charge. Hope this has helped.

Xstyle

So is a standing charge more beneficial for higher energy users?

HappyMJ

Xstyle wrote: »

So is a standing charge more beneficial for higher energy users?

No difference at all. A NSC(no standing charge) is beneficial to really low users such as the owners of holiday homes which aren't used for 6 months of the year. A NSC would generate a NIL bill and a SC tariff would be £90 for the six months.

For normal users it makes no difference. With my tariff with Npower I need to use more than 2kWh per day (728kWh per year). I think you'll agree that usage would be very low for any household.

chris1973

So is a standing charge more beneficial for higher energy users?

Under the 'old' system that a lot of suppliers use(d) you had a 2 tier system which looked something like this:-

Tier 1 (Upto 728 kw/h per year) - 28p per unit
Tier 2 (Additional kw/h used above 728 kw/h) - 18p per unit

So, in this example the 10p difference on the first 728 units consumed, effectively paid for the annual standing charge - e.g 728 kw/h x £0.10 = £72.80 per year

So anybody using less than 728 units per year paid the full price of 28p/ kwh on their annual bill, and never got to use any of the tier 2 rates. (But this is no different to paying Line Rental to BT and not using the phone for many outgoing calls!)

Those using lots of electricity in the Tier 2 tariff, essentially bought more Electricity which was sold to them at the cheaper tier rate, (but it didn't make their bills any cheaper )

Under the new system, you would pay one tier of 18p kw/h for all units which you consume, but the £72.80 per year would appear as a seperate individual charge.

(These figures are just examples, they will vary from supplier to supplier and tariff to tariff)