Why do daily standing charges vary so much ?

MikeE67

I always thought that daily standing charges were related to the actual cost of supplying energy down the network ?
If so how come they vary so much between energy companies ?

As a real life example, my old supplier charged a DSC of 28p for gas where as my current DSC is only 17p 

Similarly with electricity the DSC was also 28p with my old supplier where as my current DSC is only 21p.
If it is related to energy tariff prices then it isn't really related to distribution costs after all !

[Deleted User]

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

JJ_Egan

Alternative to standing charges cost more .

BedrockFred

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

Spot on, looking at some SC's they are very high maybe so as to make it look like the unit charges are low
The energy company in this country needs a complete overhaul, as does SoLR where energy companies gain the supply from the failed company and stick you on a "deemed tariff" and are very slow to set up accounts so you can switch away, but that is another debate

Brewer20

And a very good reason to delve down into the figures as S/C can show a big difference on the end bill. I've just totted up the difference in that charge, with one supplier it worked out as much as +£30 more but the tariff was lower than I was comparing with.

MikeE67

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

I have gained then as my current supplier has marginally lower daily standing charges and marginally lower energy tariffs and I don't have exit fees either !

I thought that it had nothing to do with distribution costs as I can remember in the past that I have been on a few tariffs where the first number of energy units were higher than the rest once that figure had been reached.

Thanks to all that replied.

Ectophile

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

The alternative is no standing charge and a higher price per unit.  This would benefit low users, while hitting high users with even higher bills.

At one point, we did have another alternative - two rates per unit.  One for the first few units, and another for anything above that.  It confused customers and was done away with.

BedrockFred

Ectophile said:

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

The alternative is no standing charge and a higher price per unit.  This would benefit low users, while hitting high users with even higher bills.

At one point, we did have another alternative - two rates per unit.  One for the first few units, and another for anything above that.  It confused customers and was done away with.

High users put more strain on the network than low users /joke 
 Still don't understand why the SC is not capped and universal across the industry 

mac.d

Ectophile said:

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

The alternative is no standing charge and a higher price per unit.  This would benefit low users, while hitting high users with even higher bills.

At one point, we did have another alternative - two rates per unit.  One for the first few units, and another for anything above that.  It confused customers and was done away with.

In other words, it's just a slightly less confusing way for them to use as a profit making tool. 

bristolleedsfan

BedrockFred said:

Ectophile said:

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

The alternative is no standing charge and a higher price per unit.  This would benefit low users, while hitting high users with even higher bills.

At one point, we did have another alternative - two rates per unit.  One for the first few units, and another for anything above that.  It confused customers and was done away with.

 Still don't understand why the SC is not capped and universal across the industry 

25p was suggested in a Ofgem consultation paper some time ago, would hit very low users the most.

Ectophile

mac.d said:

Ectophile said:

DeletedUser said:

The daily standing charge is nothing more than a profit making / money milking tool for energy firms. 

The alternative is no standing charge and a higher price per unit.  This would benefit low users, while hitting high users with even higher bills.

At one point, we did have another alternative - two rates per unit.  One for the first few units, and another for anything above that.  It confused customers and was done away with.

In other words, it's just a slightly less confusing way for them to use as a profit making tool. 

Ultimately, charging money for gas and electricity is a profit making tool.  They are companies, not charities.

You can juggle things however you like between standing charges and unit prices, but they have to charge you slightly more than it costs them, or they go bust.  And a lot of energy companies have gone bust from charging too little.