Energy Standing Charge RIPOFF

kjr_2

Can anyone explain why energy companies have put up the daily "Standing Charge" SO much?
I understand completely that the cost of fuel has risen dramatically, and will continue to do so whilst we are held to ransom by continuing to import so much gas. 
In this post, my gripe is not about the cost of fuel.
It is about the astronomical increase in the Standing Charge - the energy companies costs may have risen somewhat, but that doesn't translate into a more than doubling of this extortionate charge. 
Is there a valid reason or is this just another ripoff?

PennineAcute

They say that the SC is for pipelines, meters, etc.  In all honesty, the money they raise from the SC goes into their bank and helps to pay their bills. whether it be for meters, piping, staff costs, purchasing of energy,etc.  So the hike in the SC is down to the hike the gas prices and goes to help pay their bills.

The other alternative is to abolish SC and incorporate it into the unit price. 

Utilita (the only company I think to not have s standing charge) have a zero standing charge, but their Unit Price for the first two units of energy is much higher than the reminder of the units used in a day. 

emmajones1976

The only reason is because they are losing about £600 per customer per annum at the moment so increasing the standing charge allows them to claim some of it back.

Thats it. No other reason.

Ultrasonic

The standing charge has not straightforwardly been a charge for just maintaining the service for a long time, or there wouldn't have been tariffs with zero standing charge available. Just think of it as one of the two components that energy suppliers can adjust to define the total bill, and potentially make certain tariffs appeal to certain types of customer (low vs high energy users). 

Seen in this context I don't personally view recent standing charge increases as a 'rip-off'.

bagand96

It would be interesting to know a ballpark figure per property for:

- costs of operating/maintaining/upgrading the networks
- regulatory charges, industry levies etc
- government levies

It will never be an exact science as it would vary year to year.  But would be interesting to see all the same, then at least we could see if the current standing charges are indeed a "rip-off" or not when these threads crop up.

14 months ago I was paying 7.5p per fuel for standing charges.  But that's a supplier no longer with us as they weren't financially viable - so the standing charges were likely a loss leader to make them competitive!

QrizB

kjr_2 said:

Can anyone explain why energy companies have put up the daily "Standing Charge" SO much?

You are the second person asking this today:

https://forums.moneysavingexpert.com/discussion/6329002/standing-charges-on-gas-and-electricity-supplies

All the same answers apply in your case too.

savers_united

I have just checked my standing charge for water / sewage. It's £130 for the year.
So I guess anything between £80 - £100 per fuel per household per year is about right to cover the fixed costs maintaining the network.

Maybe like water the cost should be fixed regardless of tariff so its clear for everyone, but unlike water with energy your free to choose your provider and switch to the best deals, So if your not happy with a high SC you can switch provider that based on your usage may work out cheaper having a higher unit rate and lower SC.
A high user will likely be better off with a lower unit rate and higher SC. 

I would forget the SC and.instead focus on the overall cost based on your usage. If you are a very low user than a high SC can make up a large proportion of the bill, unfortunately energy providers are up against it at the minute and have little scope and no interest in attracting new customers. 

Indy_Scot

I agree here is my example on recent bill from 20 Oct 2021 to 25 January 2022

Current Tariff                                 £320.15
New Tariff (old standing charge)    £286.65
Old Tariff (Oct 2021 end)                £198.14

My tariff details are

                            GAS                                   ELECTRIC

New Tariff            Standing Charge 33.88     Standing Charge 35.091

                            Unit Rate KWh 4.093        Unit Rate KWh 20.975

Old Tariff              Standing Charge 19.95     Standing Charge 15.75

                            Unit Rate KWh 2.462        Unit Rate KWh 16.305

The only reason why I fixed again in October 2021 was to safeguard any price increases.  Based on the current price cap my bill for 20 Oct 2021 to 25 January 2022 would of been £246.44 (therefore currently paying £73.71).  Taking the potential price hike in April 2022 I am expecting to saving more than £73.71

anderson24

Ultrasonic said:

Seen in this context I don't personally view recent standing charge increases as a 'rip-off'.

How can a more than doubling of the standing charge overnight not be seen as a rip off?

It's clearly a way for the energy companies to counter their potential loss in profit due to customers cutting back their energy use because of the massive price increases.

EssexHebridean

anderson24 said:

Ultrasonic said:

Seen in this context I don't personally view recent standing charge increases as a 'rip-off'.

How can a more than doubling of the standing charge overnight not be seen as a rip off?

By reading the clearly provided information on the subject which has been linked to repeatedly on here. 

anderson24 said:

Ultrasonic said:

Seen in this context I don't personally view recent standing charge increases as a 'rip-off'.

It's clearly a way for the energy companies to counter their potential loss in profit due to customers cutting back their energy use because of the massive price increases.

No, it’s clearly not in the case of a price cap tariff. In fact, if you read the clearly provided information on the subject which has been linked to repeatedly on here you’ll discover that it has almost nothing to do with the providers. 

[Deleted User]

Might seem a rip of but it covers the cost of ;
Maintaining the energy infrastructure, including the wires and pipes that carry gas and electricity across the country to your home.  Keeping your home connected to the energy network. Carrying out meter readings. Environmental and social taxes.