Standing Charge or Gas Usage Charge ??

Nada666

moneyspendexpert wrote: »

I don't see a problem with hiding or not disclosing charges within prices to cover costs. However, I'm not comfortable with paying a full years standing charge for only 1 days use of gas supply through a pre-payment meter.

I thought the whole idea of a pre-payment plan was pay for what you use. If Ofgem have not picked up on this yet, then I doubt any complaint about it now would make any difference.

No, a prepayment meter is there to make you pay as you go. If you do not want to pay a standing charge it is irrelevant what your type of meter is - it depends on your tariff.

I don't understand ValHaller's protest - he sees nothing wrong with standing charges but sees something wrong with those changing to a new tariff discovering most all new tariffs will now be standing charge ones.

Nada666

moneyspendexpert wrote: »

If the standing charge is to cover costs to supply the energy to the property then surely no energy usage means no supply charge.

I'm not disputing a general charge to cover infrastructure costs. I just think careful energy consumers on pre-payment meters pay a higher premium.

It has nothing to do with you choosing a pre-payment meter - it is only a consequence of you choosing to switch tariff. Most tariffs are now no longer two-tier (unless you choose from the one or two remaining such as Ebico or Utility Warehouse).

But it isn't important enough to you to bother to complain to Ofgem.

macman

moneyspendexpert wrote: »

BTW. I'm a vegetarian and mostly eat salads

If the gas doesn't pass through my meter 365 days a year then the meter is not being used.

If the standing charge is to cover costs to supply the energy to the property then surely no energy usage means no supply charge.

I'm not disputing a general charge to cover infrastructure costs. I just think careful energy consumers on pre-payment meters pay a higher premium.

Do you think people who drive huge gas guzzling cars should pay the same amount of road tax as people who drive small eco cars ??

What infrastructure would be required if everyone drove tractors?

No, but they should pay something towards the provision and maintenance of the infrastructure, which is the same whether you have a credit meter or a PPM. Credit meter users already subsidise the much heavier operating costs of PPM's.

ValHaller

Nada666 wrote: »

I don't understand ValHaller's protest - he sees nothing wrong with standing charges but sees something wrong with those changing to a new tariff discovering most all new tariffs will now be standing charge ones.

Nothing wrong with standing charges. What is wrong is exploiting OP's situation to swing a standing charge on the back of a meter change. OP should have been placed on the equivalent PP tariff to the previous credit tariff, IMO.

Wywth

moneyspendexpert wrote: »

I have a pre-payment gas meter, which was fitted due to financial problems. I was advised the meter would pay the bills and I would only be paying for the gas that I use.

The meter has been in place for 3 months now and I have not used the gas but the meter is showing a debt of £28!!. Contacted supplier and was told this was a standing charge, charged on a daily basis to the meter.

Hmmm, seems I'm now in more debt just for having a meter attached to the wall of my property that is not being used. I don't shop at ASDA but they do not charge me to keep their store open and available just in case I do decide to use their store.

Can a standing charge be applied to a pre-payment meter in this way ?

Yes. Consult a comparison site to find the best deal for you
http://www.moneysavingexpert.com/utilities/switch-prepaid-gas-electricity

Nada666

ValHaller wrote: »

Nothing wrong with standing charges. What is wrong is exploiting OP's situation to swing a standing charge on the back of a meter change. OP should have been placed on the equivalent PP tariff to the previous credit tariff, IMO.

The OP's situation is not being exploited. The OP has chosen to switch to a new tariff and payment rather than bother to monitor his usage himself. He had no obligation to change. As far as I can see all new tariffs with British Gas carry a standing charge regardless of payment type or meter type. IF you choose to abandon an existing tariff and pick up a new one then you will face standing charges with most any supplier nowadays.

As to who is subsidising whom - firstly, it is silly to cite electricity overheads as this is an issue that primarily affects gas. Even very low users of electricity normally still pay the full whack of standing charge with tier 1 pricing. Secondly, the subsidy is not one-to-one, it is many-to-one. That is, one customer is not having their bill go up from £1400 to £1500 to save another customer £100 - there are a great number of customers who currently pay £1400 who are deprived of the opportunity of paying only £1399 or £1399.50 per year because of the astonishing unjust two-tier tariffs. How terrible.

In a brutal free market they are of course fair - standing charges should be £35 each and every month before you have switched on a light or grilled a chop, people on prepayment meters should pay much more for each kWh they use (I see you seem to object to this fairness, however), etc.

joncombe

I would suggest switch to a tariff without a standing charge. Whilst most suppliers have dropped them, not all have. The introduction of standing charges by most suppliers has basically been an increase for low users. In my case I worked it out as roughly 1/3 increase on the tariff I was on with NPower when they changed to a standing charge. That is NOT pennies and is a significant increase.

Pretty much every business has fixed costs but the majority absorb them through the prices they charge. For instance a supermarket has the fixed costs of maintaining the building (and probaably car park), business rates, insurance, electricity and/or gas for heating and lighting, insurance, staff costs, point of sale systems, stock management systems, distribution, warehouses and so on. Yet supermarkets do not charge you an admission charge or require you to pay a subscription fee before allowing you to shop, the fixed costs as simply recovered through the costs of the product. If energy suppliers were being forced to sell energy at cost price (I.E no profit margin) the need for a standing charge would be understandable, but they are not. The vast majority of things are either pay a fixed costs and use as much as you like (water, sewage, tv license, broadband) or pay as you buy/use (e.g. food, mobile phones etc). Having two different charges for energy is just another way for suppliers to obfuscate and confuse.

If standing charges are really about recovering costs they should be fixed across all tariffs and all suppliers, probably by the regulator. As I've posted here previously when I compared the different Npower tariffs I was offered the standing charges varied by as much as a factor of 3. So they are clearly not being used to recover "fixed" costs, or there would not be such a variation.

Wolf3

I could also suggest switching your gas supply to another supplier if they cannot provide a PPM tariff without a standing charge. You would probably found yourself in the same situation staying with the credit meter as most energy companies are bringing themselves into line with OFGEM's market review. As the debt is minor you could transfer suppliers to a tariff without a standing charge, however, potentially you could end up in the same spot if the regulations are brought into effect.
The standing charges have always been there, as previous posters have already commented the DNO have a charge on all meters to cover the costs of maintaining the network. the 2 tier pricing just hid the standing charge, your energy supplier was just making a loss on providing you with gas.
Whether you agree with OFGEM or not they are trying to simplify the pricing structure so people can compare more transparently. Then again that is the main reason for these forums and all those comparison sites to see if there are any better deals

Nada666

Wolf3 wrote: »

Whether you agree with OFGEM or not they are trying to simplify the pricing structure so people can compare more transparently.

Except deprecating two-tier tariffs by standing charge tariffs does nothing to help.

moneyspendexpert

I don't want to get into a discussion about "why should we subsidize you rant".

My issue was with the fact that the pre-payment meter was not clearly explained and I was under the assumption that pre-payment actually meant pre-payment, like a mobile phone. In my case it's pre-payment with a growing daily debt if I decided not to top-up.

I do understand a little more now about the SC now, thanks.