Standing charges

notional

I just noticed that my standing charge per day on my old fix was 7p.  Now all the standing charges are between 18p and 26p even on fixed deals, I assume higher on the standard variable.  This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

Hasbeen

notional said:

I just noticed that my standing charge per day on my old fix was 7p.  Now all the standing charges are between 18p and 26p even on fixed deals, I assume higher on the standard variable.  This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

A standing charge off 7p. What tariff were you on. Is this for gas or electric. What were your unit rates?

Carrot007

notional said:

I just noticed that my standing charge per day on my old fix was 7p.  Now all the standing charges are between 18p and 26p even on fixed deals, I assume higher on the standard variable.  This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

Nope it would be unreaslistic usage to not use over the cap if you lived there. So it "Punishes" second(third/seventh) home owners. Rightly so. (at 7p it would not cover it's requiremnets either. Who is that fair on?)

Gerry1

notional said:

This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

Wrong.  The cap applies to the annual cost of the typical domestic consumer's usage: there are separate limits for the standing charge and the kWh rates.  For example, the supplier cannot evade the cap by having a suspiciously low kWh rate and a standing charge of £1 per day.

Nor does it penalise the poorest consumers.  The standing charge is not very relevant because in reality the only people who benefit from a low or zero standing charge are owners of unoccupied properties or garages / outbuildings.

Update:  Corrected to show that the standing charge and kWh rate are individually capped.

wakeupalarm

Gerry1 said:

notional said:

This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

Nor does it penalise the poorest consumers.  The standing charge is not very relevant because in reality the only people who benefit from a low or zero standing charge are owners of unoccupied properties or garages / outbuildings.

or the wealthiest with second and/or holiday homes.

notional

I looked up how the price cap is calculated and it's only benchmarked using the typical home figures, it's not calculated using them.  The tables are given in kwh so it can't include the standing charge. 

Also the less energy you use, the more significant the standing charge becomes proportional to the whole bill, surely?

Neil_Jones

notional said:

I looked up how the price cap is calculated and it's only benchmarked using the typical home figures, it's not calculated using them.  The tables are given in kwh so it can't include the standing charge. 

Also the less energy you use, the more significant the standing charge becomes proportional to the whole bill, surely?

Not necessarily.  Unless you like living in the cold and with no fridge/freezer/washing machine/hot water/whatever else, you will use more energy than you do the standing charges so it becomes relatively moot.

Your fridge-freezer probably costs about half as much your typical energy standing charge for electricity to run.  A 24 kW gas boiler being used 7.5 hours a day over the course of the year, with the fuel costing 4.17p/kWh, that comes to around £7.50 per day. An electric boiler can eat £25 a day on its own, assuming a 22 kW model.

bristolleedsfan

Gerry1 said:

notional said:

This would seem to be the companies evading the price cap and penalising customers who use very little energy, ie the poorest.

Wrong.  The cap applies to the annual cost of the typical domestic consumer's usage: it does not apply to the kWh rates, so if a company chooses to hike its standing charges it will have less headroom available for any increase in its kWh rate.

Nor does it penalise the poorest consumers.  The standing charge is not very relevant because in reality the only people who benefit from a low or zero standing charge are owners of unoccupied properties or garages / outbuildings.

Energy companies who "want" to stay below the cap  when kwh rate is very close to cap have been hiking standard charges as backdoor way of increasing prices that is the reason Bulb are increasing standing charges now and the reason Octopus upped Gas standing charge from 21p to 26p on its fixed rate tariffs direct from its website in February, subsequently middle of April Octopus dropped SC back to 21p when it increased kwh rate above previous cap, below new cap

Higher standing charge/lower kwh rate disproportionately disadvantage "very" low users.

phillw

wakeupalarm said:
or the wealthiest with second and/or holiday homes.

Or skin flints that live on their own and are obsessive about keeping their usage down.
I keep the heating off for at least 9 months of the year.

Covid has increased my energy bills somewhat.

Gerry1

notional said:

I looked up how the price cap is calculated and it's only benchmarked using the typical home figures, it's not calculated using them.  The tables are given in kwh so it can't include the standing charge. 

Also the less energy you use, the more significant the standing charge becomes proportional to the whole bill, surely?

Unfortunately, you've got it wrong once again.

Ofgem clearly states that "The cap applies to the price your supplier charges for each unit (kWh) of electricity and gas used, and your standing charge.".

If you do the simple sums, you'll see that the maximum standing charge for DD gas is 25.33p/day, for DD single rate electricity it varies from 22.2p/day in London to 26.10p/day in the North of Scotland, and the equivalents for multi-rate electricity are 22.29p/day and 26.10p/day, plus VAT.

It's true that the less energy you use, the more significant the standing charge becomes proportional to the whole bill, but it still costs the same to dig up the road to replace the pipes and wires etc, they wear out just as fast even if you never use a single kWh !