Energy news in general

pochase · 27 July 2022 at 6:27AM

The energy suppliers are not keeping the standing charges, they are just collecting them and paying them over to the different recipients, for example for the SOLR process to Ofgem or for the maintenance.

The current standing charge for electricity "generates" about £ 5 Billion per year. That is for everything, a huge part for the SOLR process.

To get enough money for the required £54 Billion upgrade of the grid over two years the standing charge the standing charge for electricity needs to increase to over £3.

savers_united · 27 July 2022 at 8:37AM

The point most seem to miss is that SC have only really been high (in my view where they always should have been) the last 12mths or so. Up until then millions were happy to come onto the Mse forums and boast about the tariff they have just switched to with zero or next to nothing standing charge, a silly low unit rate.

It's never a free lunch and this is now starting to catch up with us, the infrastructure is expensive to maintain and improve, it's aging yet people on here are still kicking off about the SC increases, even when a breakdown of the charge is explained. You cannot have it all, if you go cheap you pay twice (later), pay what actually reflects the costs to maintain / improve the net work and over the longer term you get a flatter SC.

It's just unfortunate it's taken an event like we see now for everyone to realise this, and for customers at a time where SOLR charges are already adding to a SC.

SJMALBA · 27 July 2022 at 9:02AM

savers_united said:

The point most seem to miss is that SC have only really been high (in my view where they always should have been) the last 12mths or so. Up until then millions were happy to come onto the Mse forums and boast about the tariff they have just switched to with zero or next to nothing standing charge, a silly low unit rate.

It's never a free lunch and this is now starting to catch up with us, the infrastructure is expensive to maintain and improve, it's aging yet people on here are still kicking off about the SC increases, even when a breakdown of the charge is explained. You cannot have it all, if you go cheap you pay twice (later), pay what actually reflects the costs to maintain / improve the net work and over the longer term you get a flatter SC.

It's just unfortunate it's taken an event like we see now for everyone to realise this, and for customers at a time where SOLR charges are already adding to a SC.

You almost seem to be blaming consumers; it's the Westminster Government & regulator who put in place/oversaw the market, with an emphasis on maximum 'competition', based upon little/no entry requirements for suppliers - were consumers supposed to ignore that, particularly when Ofgem, Citizens Advice, MSE and all the rest kept hammering home the 'switch' message? And, in reality, how many actually switched, anyway? AFAIK, the so-called 'price cap' for SVT was brought in because 'insufficient' numbers were switching...

Alnat1 · 27 July 2022 at 9:26AM

People had the benefit of switching to lower tariffs for a few years and now think of that as normal. It never really was.

The world has changed again and we're back to how it was for many years, pretty much the same prices for everyone, just like when your gas came from British Gas and your electricity from your region's electricity board.

Sea_Shell · 27 July 2022 at 9:27AM

SJMALBA said:

savers_united said:

The point most seem to miss is that SC have only really been high (in my view where they always should have been) the last 12mths or so. Up until then millions were happy to come onto the Mse forums and boast about the tariff they have just switched to with zero or next to nothing standing charge, a silly low unit rate.

It's never a free lunch and this is now starting to catch up with us, the infrastructure is expensive to maintain and improve, it's aging yet people on here are still kicking off about the SC increases, even when a breakdown of the charge is explained. You cannot have it all, if you go cheap you pay twice (later), pay what actually reflects the costs to maintain / improve the net work and over the longer term you get a flatter SC.

It's just unfortunate it's taken an event like we see now for everyone to realise this, and for customers at a time where SOLR charges are already adding to a SC.

You almost seem to be blaming consumers; it's the Westminster Government & regulator who put in place/oversaw the market, with an emphasis on maximum 'competition', based upon little/no entry requirements for suppliers - were consumers supposed to ignore that, particularly when Ofgem, Citizens Advice, MSE and all the rest kept hammering home the 'switch' message? And, in reality, how many actually switched, anyway? AFAIK, the so-called 'price cap' for SVT was brought in because 'insufficient' numbers were switching...

Exactly. It's NOT the customers fault. Who wouldn't want to get the "best" deal, where available.

The question should be, should they have been available!!!

In hindsight (wonderful thing that!!), maybe within these "cheap" deals, there should have been a minimum SC that they could not go below, to ensure that enough money WAS being ploughed back into the pot for these large infrastructure projects.

What_time_is_it · 27 July 2022 at 9:29AM

Alnat1 said:

People had the benefit of switching to lower tariffs for a few years and now think of that as normal. It never really was.

The world has changed again and we're back to how it was for many years, pretty much the same prices for everyone, just like when your gas came from British Gas and your electricity from your region's electricity board.

The key difference being that 40+ different companies are / have been syphoning off cash to their major shareholders.
Spiv economics.

pochase · 27 July 2022 at 10:40AM

Sea_Shell said:

SJMALBA said:

savers_united said:

The point most seem to miss is that SC have only really been high (in my view where they always should have been) the last 12mths or so. Up until then millions were happy to come onto the Mse forums and boast about the tariff they have just switched to with zero or next to nothing standing charge, a silly low unit rate.

It's never a free lunch and this is now starting to catch up with us, the infrastructure is expensive to maintain and improve, it's aging yet people on here are still kicking off about the SC increases, even when a breakdown of the charge is explained. You cannot have it all, if you go cheap you pay twice (later), pay what actually reflects the costs to maintain / improve the net work and over the longer term you get a flatter SC.

It's just unfortunate it's taken an event like we see now for everyone to realise this, and for customers at a time where SOLR charges are already adding to a SC.

You almost seem to be blaming consumers; it's the Westminster Government & regulator who put in place/oversaw the market, with an emphasis on maximum 'competition', based upon little/no entry requirements for suppliers - were consumers supposed to ignore that, particularly when Ofgem, Citizens Advice, MSE and all the rest kept hammering home the 'switch' message? And, in reality, how many actually switched, anyway? AFAIK, the so-called 'price cap' for SVT was brought in because 'insufficient' numbers were switching...

Exactly. It's NOT the customers fault. Who wouldn't want to get the "best" deal, where available.

The question should be, should they have been available!!!

In hindsight (wonderful thing that!!), maybe within these "cheap" deals, there should have been a minimum SC that they could not go below, to ensure that enough money WAS being ploughed back into the pot for these large infrastructure projects.

My understanding is that the standing charges were always paid over by the supplier, they were just not paid by the customer, they were paid by the supplier.

Xbigman · 27 July 2022 at 11:06AM

The standing charge is not the amount passed to the National grid nor has it ever reflected the actual costs of running the grid. Each supplier has to make various payments to NG and OFGEM and how that money is billed to customers was completely up to each individual company. Then the cap came in. Companies who had higher unit rates and no standing charge found their unit rates fell above the cap limit and had to change and no standing charge tariff's died. As energy costs rise energy suppliers have been forced to just max out standing charges and max out unit rates to keep up with rising costs. There is no more discretion available and OFGEM pretty much controls the market now. Whether it will ever change back is debateable.
Going forward I'd like to see no standing charges and everything on the unit rate BUT there would need to be a minimum bill amount to ensure those with 2nd properties paid something into the system. That minimum amount could well be the equivalent of the current standing charge.

Darren