Scottish Power standing charge

Ian_Vestor

SP have just put me on to a new electricity tariff that will increase my next year's bill by 3900 (yes that's correct) percent. This is due to the introduction of a standing charge. They say this has been forced on them by OFGEM who have not replied to my correspondence seeking to check the veracity of what SP tell me.

Has anyone heard of a move to prohibit tariffs that do not carry a standing charge?

Nada666

Yes, this is Ofgem's doing. They have banned two-tier tariffs and reduced the number of tariffs a supplier can offer to four. As such it is not competitive for Scottish Power to waste one of their tariffs with a low-standing charge option.

molerat

They are correct that this is instigated by OFGEM, you must have a very small consumption to achieve that sort of increase, unusual for electricity. You could always switch to https://www.ebico.org.uk/

Bluebirdman_of_Alcathays

https://www.ofgem.gov.uk/simpler-clearer-fairer

matelodave

they forgot, "more expensive for low users"

greyteam1959

I am in the same position as the OP........& with Scottish Power.
I will be moving to EBICO as soon as my fixed price tariff comes to an end.

Nada666

For electricity, npower have tariffs (including a fix to the start of 2018) that are cheaper than Ebico's variable rate. For maximum exploitation of Ebico just use them for gas, not electricity.

Ian_Vestor

Thanks for the advice - I had applied to Ebico in the meantime and OFGEM have now clarified to me and state their disappointment at the misinformation being given out. My use is a lightbulb in a lockup garage so my actual cost would have risen from pennies a year to £100 (in fact I haven't paid in years as I had a £1.46 credit running) . The same must apply to hundreds of thousands, if not millions, of similar buildings.

Nada666

Ian_Vestor wrote: »

Thanks for the advice - I had applied to Ebico in the meantime and OFGEM have now clarified to me and state their disappointment at the misinformation being given out.

What did they clarify? With whom are they disappointed? Somehow I doubt they wrote you a mea culpa or did they? Or were they disingenuously blaming the supplier?

amtrakuk

I think people are making a mountain out of a mole hill with the changes in the energy price structure. My current provider is offering 11p/kW/Unit and 22p a day so on the face of it, it appears to be a 22p a day "TAX".

It may look more expensive but that is before taking into account how much cheaper the flat rate unit price is compared with the old 2 Tier system. Here in Yorkshire the last T1 rate I paid was 20p a unit and T2 of 9p a unit (Online Fixed Price Energy November 2013).

Being conservative in winter I would have used about 60 units a day as I am an all electric house. Under the old system the figures work out as;

60 x 9p a unit = £5.40
In summer about 5 units a day;
5 x 20p a unit = £1.

You may have spotted I am using two prices in that example. For simplicity I don't reach the T2 rate so always paying the higher amount. In winter I use more T2 (9p) than T1 (20p) - This assumption is for simplicity.

Under the new single rate system the figures works out as follows;

Winter; 60 units x 11p a unit (+22p standing charge)= £6.82.
Summer: 5 units x 11p a unit (+22p standing charge)= 77p.

For someone who is more energy conscious using say 10 units a day in winter and 5 units in summer.

Winter: 10 units x 20p a unit = £2.20 a day.
Summer: 5 units x 20p a unit = £1 a day

New system;

Winter: 10 units a day x 11p a unit + 22p standing charge = £1.32
Summer: 5 units a day x 11p a unit + 22p standing charge = 77p

So in fact those who are more energy concisions should actually see a reduction in their energy bills and those who use more, pay more.

retiredin2011

Until gas and electricity was de-nationalised that was how they were charged, standing charge and unit charge, as in the summer, when gas was only used for cooking, not even for hot water because we had a coal fire, the standing charge was more than the consumption.