Do All Energy Companies Have Standing Charges Now?

Former_E.ON_Company_Representative:_Malc

moneyspendexpert wrote: »

Hi,

I am currently with EON and I was forced to have a pre-payment meter fitted to recover unpaid bills and pre-pay for my gas usage. There wasn't a SC when the meter was fitted, but the pre-pay way of using gas seemed to be working quite well and not that bad afterall.

Thats UNTIL I received a similar email as above from my EON supplier that a "simpler" SC was now going to be applied!! I didnt switch to this "simpler" daily SC scheme.

My meter is now nothing more than a debt collection unit as I have decided not to use gas, as the daily SC charge builds up and puts me in more debt. Can a meter be installed just for the purpose of recovering debt and also daily SC for collecting debt.? I dont use gas anymore.

The none SC way was more "simpler" as I "kind of" or "looked like" I only paid for the gas I used. Now I pay everyday SC for gas I dont use.

Is it not the case that very low gas consumers were not using enough units to recover the SC on the 2 teir system.?

sry to muddy this thread with too much of my current issues.

Hi moneyspendexpert

If we supply your electricity through a prepayment meter, a way round the gas standing charge would be to transfer the remaining debt from the gas meter to the electricity meter. The gas meter could then be removed.

As well as removing the meter we would, though, need to completely disconnect the site. To do this, we would need the property owner's permission and confirmation there are no gas appliances in the property.

If this is done, the Meter Point Reference Number (the unique registration number given to each domestic gas supply) will be withdrawn. This means you'll have no nominated supplier and the account will close.

In future, should gas be required at the property again, the owner would need to contact their preferred supplier to arrange for a new Meter Point Reference Number.

However, if a new supply is required more than one year in the future, a live/dead test would need to be done to make sure the pipe work is structurally viable and safe. If the pipe work is found to be dead or unusable, new pipe work will be needed. This can be expensive.

There are also charges for disconnecting the meter.

Whilst there's a meter at the property and a live account, I'm afraid, a standing charge will continue to be applied.

Hope this is of interest.

Malc

Nada666

Nick_C wrote: »

In your opinion

Tautological nonsense. I posted it. Of course it is my opinion. Only an insane person prefaces their utterances with such an unnecessary qualifier.

Of course, anyone presenting evidence that disagrees with me is clearly too biased, too much of a shill, or simply too innumerate to be taken seriously. Any study that does not agree with me is clearly flawed. Just because a few thickos gave some researchers the exact answers they set out to extract in the first place doesn't make their results any more correct.

hldomster

Why don't all companies just charge in the following format:

No. of units x Rate per unit

So if you charge 10p per kWh and someone uses 1000kwh they would be charged £100. That would be truly simple. I find the standing charge is not simple, it feels like I am paying to pay.

Wywth

CGORST wrote: »

I never used to pay a standing charge but all of a sudden, the only plans I am being offered by Eon have standing charges. Do all energy companies do this now?

I queried it with Eon and they said it was like this because most customers want a standing charge but to be honest I live on my own and I begrudge having to pay even if I don't use any energy!

2 tier priced tariffs are being removed because of Ofgem requirements.

Shame you didn't cast your vote (and all the others in a similar boat) in MSE's poll a while back, which resulted in the outcome people didn't want 2 tier pricing even if it did mean higher costs.

All you can do is consult a comparison site to find the best deal for you.

alinwales

When I moved supplier recently, the standing charge on the old tariff was £160 per year. The new tariff was £60. That the SCs can vary so wildly shows that there is still ways of confusing consumers (and debases the argument about paying for the fixed charges - if they were fixed then everyone in the same street would pay the same SC). For low users, a low SC and high unit price is probably better than high SC and low unit price (one would think).

Personally, I loved the No SC tariffs. Whilst my electricity was always over the tierA threshold (means I paid the same as those on SC), my gas usage over the summer was virtually nil, so on No SC, I paid... vitually nil!

I think that MSE Martin had the right end of it when he did declare that forcing all suppliers to simplify their ways meant that those benefiting from being intelligent and proactive in switching etc. would stand to lose most.

DragonQ

hldomster wrote: »

Why don't all companies just charge in the following format:

No. of units x Rate per unit

So if you charge 10p per kWh and someone uses 1000kwh they would be charged £100. That would be truly simple. I find the standing charge is not simple, it feels like I am paying to pay.

Because it would be far, far too easy for people to compare prices. If E.On charge 14.4p/kWh in your area and British Gas charge 14.8p/kWh, who are you gonna go with? Obviously E.On (except for a small minority who have a grudge against that company). What about if E.On have a daily standing charge of 20p plus 12p/kWh, whereas British Gas have a daily standing charge of 40p plus 10p/kWh, who's cheapest here? Now it depends on your usage, meaning you have to put some effort in comparing.

Such a system would entice real competition, which none of the energy companies wants and which Ofgem seems too cowardly to enforce.

anotheruser

A standing charge is better because it's easier to work out what your bill will be.
Before I had to pay some at a higher rate, then the rest at a lower rate. I don't know whether this was calculated on a daily rate, monthly, billing cycle?

Having a standing charge means lower charges for gas, but as you're automatically paying the standing charge then there is little difference in price.

Nada666

anotheruser wrote: »

A standing charge is better because it's easier to work out what your bill will be.
Before I had to pay some at a higher rate, then the rest at a lower rate. I don't know whether this was calculated on a daily rate, monthly, billing cycle?

Having a standing charge means lower charges for gas, but as you're automatically paying the standing charge then there is little difference in price.

If it doesn't affect you it doesn't affect you. Good for you. If as a grown adult you have never once in your life taken the three minutes to understand the two-tier tariff structure then you are too lazy and disqualify yourself from passing comment. You spend less than thirty seconds one time calculating your monthly standing charge on a two-tier tariff.

It has zero effect on choosing a new tariff.

For those it affects I would say a doubling to tripling of the bill does not constitute "little difference".

moneyspendexpert

E.ON_Company_Representative:_Malc wrote: »

If we supply your electricity through a prepayment meter, a way round the gas standing charge would be to transfer the remaining debt from the gas meter to the electricity meter. The gas meter could then be removed.

Thanks Malc, but I'm not prepared to go through that process as I don't agree with the meter being used for the purpose of collecting a debt. The meter should be used for the purpose of metering energy usage and the debt should be collected seperately. I am in no position financially to pay EON over £400 to discontinue using gas in my home.

joncombe

Nick_C wrote: »

Perhaps some customers were not paying enough to cover the standing charge. If that was the case, it shows it was an unfair system. The energy companies need to cover their fixed costs, and if some people were not paying enough to cover the costs of supply then the rest of us were subsidising them!

Yes quite possibly, but it also depends on whether the standing charge was actually there to cover "fixed costs" or not. The Standing Charges with npower vary hugely (when I last looked, by as much as a factor of 3). If they were really abour fixed costs they would be the same on all tariffs and across all suppliers.

Every business has fixed costs, the vast majority cover these via the margins they make on the products they sell and I do not understand why energy companies cannot do the same. When npower introduced standing charges I worked out that no one would pay less, but lower uses would pay more. So if some users were subsidising other users they are not paying less, and so not seeing any benefit to the changes.

Take the example of someone living in a rural area. The power cables to get to their property may have to go over many miles of open countryside to serve a small number of properties. The costs of laying these cables is high as is maintaining them. For example, a tree falling on the cables, damaged by snow or wind etc. This is probably more likely in rural areas too where the cables may have to be run over high moorland etc where there is more wind and more snow. In an urban area the cables will serve a far higher number of properties, so the costs are spread out over more users. Similarly the costs of sending a meter reader to a village where a company may only have a small number of customers compared wiht a town where they will have many costs more. Therefore by the same logic, users in urban areas should pay a lower standing charge then those in rural areas. I personally don't think this is right (and I don't live in a rural area).

In much the same way someone posting a letter from say the Isles of Scilly to the Shetland Isles pays the same postage cost for their stamp as someone posting a letter from Croydon to Sutton. Should we have variable postage charges based on distance or a one price for everyone, meaning some are paying less than their costs whilst others pay more? I personally think the latter is a fairer system.

To use the example of a supermarket. They will have fixed costs:-

• Cost of building, renting or leasing the building
• Cost of renting or leasing the car park
• Cost of maintenace of the building and car park
• Heating costs
• Lighting costs for the supermarket and car park
• CCTV costs
• The energy costs of the fridges and freezers
• Staffing costs
• Insurance
• Business Rates
• Distribution infrastructure (warehouses etc)
• etc

Yet supermarkets recover these costs through the charges on the products sold rather than charing everyone a "membership fee" before they can do any shopping there.

If energy companies were selling their gas and electric on a non profit basis this might be fair but they aren't. Again to use the same example, I live only 5 minutes walk from a supermarket, so I don't drive there. Yet the supermarket has a large free car park which costs them money but I don't use. So on the same logic, I'm subsidising those who do drive so why shouldn't I pay less? (again, I don't agree that I should pay less).

I also think the energy companies should do more to reduce these costs. Why do electric and gas metres need to be in the home? Water metres aren't. If they wern't inside they could be read at any time reducing costs of meter readers visiting properties when no one is home. It would also mean they could carry out the safety inspections, check the meter has not been by-passed etc. Perhaps I should start charing them an admin charge each time they want to access the meter and a storage charge?