Standing Charge...

The_Economist

If there is one thing that annoys me its the standing charge on the electric & gas bill.
What does it actually cover, is it for maintenance.
Seems to just keep rising in cost...:mad:

greyteam1959

Standing charges are just another little fiddle...........
But they pay for the infrastructure of the supply network.
Cables, pipes, sub stations, pylons, meters, meter readers etc etc

Neil_Jones

Standing Charges were the preferred replacement for the old "first 500 units at 7.8p per kWh and the rest at 3.53p per kWh" thing, which apparently nobody could understand and that's why it was changed to what we have now...

[Deleted User]

Neil_Jones wrote: »

Standing Charges were the preferred replacement for the old "first 500 units at 7.8p per kWh and the rest at 3.53p per kWh" thing, which apparently nobody could understand and that's why it was changed to what we have now...

It was called "block tariff " which most people picked as it was confusingly termed a "no standing charge tariff "
The first block of kwhs contained the 92 days quarterly billing standing charges built in with the pence per kwh.
.So if Suppliers yearly charge was £80 then in that quarter £20 had to be paid as standing charges .once the number of kwhs was reached , and the £20 was paid ,it then dropped to the basic pence per kwh..Low users would benefit because they may not actually reach that number of kwhs in that quarterly billing cycle..
I remember Ann Robinson on her BBC show railing against it and inviting that years Mastermind champion, Fred Housego, the London Cabbie to see if he could understand a basic electric bill ..and he struggled with it.
OFGEM simplified it , but I see some suppliers using block tariffs once again

UnclaimedEnergy

Utilita being one of them

Gerry1

Neil_Jones wrote: »

Standing Charges were the preferred replacement for the old "first 500 units at 7.8p per kWh and the rest at 3.53p per kWh" thing, which apparently nobody could understand and that's why it was changed to what we have now...

Nope.

Standing charges aren't a replacement for anything, the old Electricity and Gas Boards all had them since the year dot. After the markets were privatised some suppliers bamboozled people by claiming to have 'No Standing Charge' but they recouped the same amount by having a surcharge on the initial X units. Very people benefited except owners of second homes or lockup garages.

Incidentally, for a while there was similar confusion with electricity bills; there was something called the Fuel Cost Adjustment or suchlike and it added (or subtracted) 0.0000xyzx pence to the kWh rate for every £ that the coal price was above (or below) a benchmark of £y per tonne.

The Standing Charge principle is quite fair because there are all sorts of overheads that the industry has to bear even if you don't use a single unit. In the days of the Electricity and Gas Boards it would have been unfair to have abolished them because the kWh rates would have burdened high users such as retired people and northerners.

However, the same degree of regulation is no longer needed because there are multiple suppliers from which to choose, but the claims still need to be fair and transparent.

Talldave

The wild variation in standing charges between suppliers would indicate that we're not all paying the same for the infrastructure costs, or it's just a juggling act with the unit rate and bears no relation to infrastructure costs at all.

I bought petrol today from a supplier on a zero standing charge tariff with a very attractive unit rate. The same supplier also sold me milk free of standing charges as well.

Gerry1

Talldave wrote: »

I bought petrol today from a supplier on a zero standing charge tariff with a very attractive unit rate. The same supplier also sold me milk free of standing charges as well.

But do they run petrol and milk pipelines all the way to your door and keep them working safely 24/7 ? :huh:

silverwhistle

Talldave wrote: »

The wild variation in standing charges between suppliers would indicate that we're not all paying the same for the infrastructure costs, or it's just a juggling act with the unit rate and bears no relation to infrastructure costs at all.

There is a relationship, but the decision of how to charge rests with the company as to how to divide the costs and the consumer needs to decide if that suits them. Even on the same tariff prices vary by region which is why they always ask for your post code when quoting.



I've just changed from Ebico who had a zero standing charge and a very high unit rate which suited me as a low user with solar panels, but following another rise I determined that another tariff was better.


On the question of transparency I'm also in the process of changing from Ebico's zero standing charge gas tariff as the tariff they replaced it with has an ostensible ZSC but a minimum annual bill which effectively makes them more expensive than another company with a low standing charge.

Haarlem

Gerry1 wrote: »

Nope.

The Standing Charge principle is quite fair because there are all sorts of overheads that the industry has to bear even if you don't use a single unit. In the days of the Electricity and Gas Boards it would have been unfair to have abolished them because the kWh rates would have burdened high users such as retired people and northerners.

However, the same degree of regulation is no longer needed because there are multiple suppliers from which to choose, but the claims still need to be fair and transparent.

At one time I would agree with you. However there is a wide variation in standing charges now they bare no relationship to the cost of the overheads you quote.

boliston

i would prefer a standing charge to paying more for the first 'x' number of units