Standing Charge

bendipa

In Thatcher's day people voted for privatisation with both feet. If ever anyone said that they thought it was a bad idea, they were considered old-fashioned, a socialist, an idiot or all 3. As usual the British public never think things through but were happy to make an easy buck on energy shares when they were floated off at the time. People in this country rarely learn, and if/when they do it's too late.

Wywth

bendipa wrote: »

In Thatcher's day people voted for privatisation with both feet. If ever anyone said that they thought it was a bad idea, they were considered old-fashioned, a socialist, an idiot or all 3. As usual the British public never think things through but were happy to make an easy buck on energy shares when they were floated off at the time. People in this country rarely learn, and if/when they do it's too late.

Thatcher is long gone, but I don't see Ed Miliband rushing to re-privatise the energy suppliers; in fact he's just ruled it out.

When you grow up, you'll understand.

yelowee

Wywth wrote: »

Thatcher is long gone

Its was you, you were the cause:D

joncombe

I asked Ofgem about the requirement for a standing charge. As I expected they have confirmed that they do not require a standing charge to be charged and confirm that it can be zero. NPower have told me over the phone that they are required to introduce a standing charge but this is clearly not so.

I am switching to Scottish Power who do not charge a standing charge. Ebico is another supplier without a standing charge. Clearly Ofgem do not know their own market with the assertion:-

[FONT=&quot]Suppliers that do not have standing charges at the moment have complex mutli-tier tariffs, which we will ban.[/FONT]

Obviously the industry regulator has never heard of Ebico then.... Anyway here is the response I had from Ofgem:-

[FONT=&quot]Thank you for your email.[/FONT]

[FONT=&quot]As you are aware, Ofgem is currently undertaking a Retail Market Review which is designed to simplify tariffs. The proposals which have published are currently subject to consultation and the changes have not been implemented. Standing charges allow suppliers to recover their fixed costs. If they were banned it would mean that low users of energy, including vulnerable and fuel poor customers, may be an unattractive proposition for suppliers, as without a standing charge suppliers would be uncertain that they could recover their fixed costs from these low users. These factors risk creating a two tier market where the best deals are reserved for high users of energy, and uncompetitive deals are offered to low users, who are often the fuel poor. Suppliers that do not have standing charges at the moment have complex mutli-tier tariffs, which we will ban. [/FONT]

[FONT=&quot]I can confirm that Ofgem has not instructed Npower or any other supplier to apply a standing charge to their tariffs. Suppliers are responsible for setting the level of the standing charge which they can set at zero if they wish. We understand that there are still suppliers that are not applying a standing charge (although you may want to check with them if this will remain the case), and of the suppliers that have introduced one, we understand that in some cases they are significantly lower than the rate Npower has chosen to charge its customers. [/FONT]

[FONT=&quot]We published our consultation on 27 March, and you which can read about the proposals in our factsheet via the following link: http://www.ofgem.gov.uk/Media/FactSheets/Documents1/Factsheet 115 getting the best deal_WEB.pdf. If you would prefer to look at more detailed information it can be viewed on the following page of our website: http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=460&refer=Markets/RetMkts/rmr. The following paragraph is relevant: [/FONT]

[FONT=&quot]‘2.10. We propose to have tariffs with a simple two-part structure, i.e. a standing charge (which can be zero) and a unit rate. Suppliers will no longer be allowed to offer complex tariffs which vary the standing charge or unit rate for different levels of consumption. Suppliers will need to reflect in the standing charge or the unit rate any charges that are related to energy supply. We are also proposing to specify the list of surcharges that do not have to be incorporated in a unit rate or standing charge. We propose that these surcharges will also have to have a simple structure.’ [/FONT]

[FONT=&quot]Finally, I would suggest that you ask Npower to clarify any further queries you have on this matter. You may also wish to consider switching away from Npower, which is the best way a consumer can show a supplier that they are dissatisfied with the change to their terms.[/FONT]

[FONT=&quot]Should you wish to respond to the consultation, I would ask that you please do so by 23 April 2013. [/FONT]

[FONT=&quot]Yours sincerely,[/FONT]

[FONT=&quot]XXX
[/FONT]
[FONT=&quot]Consumer Affairs[/FONT]

Nada666

A deeply evil and idiotic response from Ofgem. Disgusting.

25.6_Pre-contract_oblig

Thanks very much joncombe for making the Freedom of Information request to Ofgem and posting their reply in this thread too.

As footyguy said in Post #23 of the thread:
MSE News: Npower revamps energy bills – but low users could lose out, Ebico are potentially a good choice for low users.

See the
Cheap Gas & Electricity Guide.
http://www.moneysavingexpert.com/utilities/you-switch-gas-electricity

There is also a Guide for Prepaid Cheap Prepaid Gas & Elec
http://www.moneysavingexpert.com/utilities/switch-prepaid-gas-electricity
here at MSE.

Like others, I have also checked with Ebico and they are not going to introduce a Standing Charge.

See also the survey at Which? - conducted in October and November 2012.
Energy companies rated
http://www.which.co.uk/switch/energy-suppliers/energy-companies-rated

Ebico are 3rd and npower are 15th (last).

25.6_Pre-contract_oblig

Nada666

25.6_Pre-contract_oblig wrote: »

As footyguy said in Post #23 of the thread:
MSE News: Npower revamps energy bills – but low users could lose out, Ebico are potentially a good choice for low users.

Sixty percent more expensive = good???

25.6_Pre-contract_oblig

As a low user of Gas my annual Gas Bill with Ebico would be £3.28 (inc VAT)
which is less than
£144.17 Gas Standing Charge + £2.46 = £146.65 (inc VAT) with npower.

25.6_Pre-contract_oblig

Nada666

25.6_Pre-contract_oblig wrote: »

As a low user of Gas my annual Gas Bill with Ebico would be £3.28 (inc VAT).

That is zero usage, it is not low usage. What matters is the effect on those in insulated properties with gas combi-boilers who 'need' to use gas for hot water and cooking etc.

wakeupalarm

Will be interesting to see how long Ebico can hold out without a standing charge when thousands of users with usage as low as £3.28 sign up with them. I know they are not for profit, but just like the reasons for introducing standing charges, there are fixed costs with each customer which aren't going to be covered with bills of £3.28.

I give it 18 months from now.