How to get Ofgem to set energy standing charges to zero?

wrf12345

Currently, setting standing charges to zero would add approx 15 percent to the tariff rates for gas and elect but removing the daily charge of 50p (for gas and electric) would be very Green as it would emphasize the benefits of low energy usage rather than penalize it.

Incidentally, wholesale electric rate is 7p kwh against current cap of 21p so electricity should be coming down not going up.

But how to persuade ofgem - who have the power - to set the standing charge to zero - do they even have the intelligence to see the benefits of it?

QrizB

wrf12345 said:

Currently, setting standing charges to zero would add approx 15 percent to the tariff rates for gas and elect but removing the daily charge of 50p (for gas and electric) would be very Green as it would emphasize the benefits of low energy usage rather than penalize it.

How would you prevent very low occupancy properties like holiday homes and second homes being subsidised by everyone else?

Incidentally, wholesale electric rate is 7p kwh against current cap of 21p so electricity should be coming down not going up

Where are you getting this nonsense from? Electricity hasn't regularly been that cheap (over a full day) since June last year.

https://www.nordpoolgroup.com/Market-data1/GB/Auction-prices/UK/Daily/?view=table

But how to persuade ofgem - who have the power - to set the standing charge to zero - do they even have the intelligence to see the benefits of it?

To persuade Ofgem:

• Stand for Parliament and get elected
• Have your party form a Government
• Be appointed Energy Minister
• Tell Ofgem to set the SC to zero

Suggestions that you can achieve much the same result by paying for the PM's flat refurbishment are idle gossip.

Merlin139

So by my calculation it would add 2.9p per kWh of Electric and 0.76p per kWh of Gas. 

I would suspect that the people who are struggling the most would be reducing the amount of Electric below the 3100 kWh per year of a Typical user and the 12000 kWh of Gas.

Your idea would help low users of which I am one. 2100 kWh Electric and 8900 kWh of Gas. From the many posts I have seen on these boards the vast majority would be worse off.

Fred2712

Standing charges were abolished a few years ago by Ofgem but the suppliers just had higher rates for the first X number of units used to recover the cost instead, Ofgem then went back to standing charges again as it was too confusing for customers to compare between suppliers.

savers_united

Your suggestion of zero standing charge is only beneficial for low users which I assume you are, but what you are doing is passing the cost of maintaining the network and other costs onto higher users, A gas customer using 24000kw per annum would pay 3x the amount towards maintaining the network, green levies, meters, social funds etc than someone using 8000kw per annum with zero standing charge. But don't really see why that should be the case when we should all be sharing those fixed costs. If you use more energy you should pay more, which you do but to lump the addtional fixed networks costs onto these higher users seems very unfair. 

Appreciate this is an energy forum but why stop there, why not charge per mile you drive, those people cause more damage to the roads and more pollution, but often pay lower or zero tax than someone only doing a short run to the shops a few times a week.

Why do we all pay a fixed TV license when some of us only watch a couple of hours a week and others are watching the TV all day. 

The only other option which it used to be, was to charge the first x KWh at a higher rate and then the rest at a lower rate, so the standing charge is built into the higher rate instead, but a low user will often never get onto the lower rate. 

You might want to take a look at your water bill, you will find a service charge of over £100 per annum on there as well, again its a fixed charge regardless of the amount of water you use. 

wrf12345

But the point is that we should all be using less energy so getting rid of standing charges is the Green thing to do. Ofgem is generally incompetent, hence the previous mess of two tier charging for zero standing charges - if they had got rid of standing charges altogether they could have mandated a single rate, which would have been much simpler than current system. Incidentally, ofgem can't even be bothered to give the capped rates in the same form as they appear on bill - the current capped rates is the only time in their existence that they have done anything remotely useful.

My water bill has a standing charge but it is nothing like a £100 a year, but another thing that should go as it penalizes low users, though the wear and tear from water is much greater than gas or elect so perhaps they have a much stronger case.

I got the wholesale electric rate via google search so be interested to hear what it actually is if that info is misleading.

Be interesting to see what would happen if everyone in the country turned their gas off at the meter in protest on April 1st - who would blink first? Cold showers are good for your health!

MWT

wrf12345 said:

But the point is that we should all be using less energy so getting rid of standing charges is the Green thing to do.

The standing charges are real, they are not invented, the network has costs so why is it 'green' to try to pretend otherwise?

If you believe it is 'green' to encourage people to move from gas to electric heating and from petrol/diesel to EV then everyone's use of electricity will be going up, not down, a measure which, in your view, would incentivise reduced usage is not going to work in favour of 'green' moves in other energy sectors...

[Deleted User]

Is it also right that consumers who export energy from March through until September should pay nothing towards the Grid? It was partly solar PV owners who switched to Ebico during the summer months that led to its demise. There will always be costs associated with maintaining a supply. For example, the £13Bn cost of smart metering or the cost of restoring a supply after a failure. The present system will never be fair on everybody. Zero standing charge tariffs is a poor answer to a difficult question. 

jbuchanangb

From Feb 2008 to March 2010 I was on a "No Standing Charge" tariff for electricity. 2.5kWh per day were charged at a higher rate then the rest, which had the effect of a notional standing charge of £13.59 exc. VAT per quarter. (In July 2009). At the same time I was on a "No Standing Charge" tariff for gas. In that case 12.5kWh per day was charged at a higher rate, equivalent to a quarterly standing charge of £9.34 exc. VAT per quarter. My spreadsheets still contain the data, and the fields are available to use again in the unlikely event that anyone offers such tariffs again.

MattMattMattUK

wrf12345 said:

But the point is that we should all be using less energy so getting rid of standing charges is the Green thing to do. 

We should all be using less energy, bit getting rid of standing charges is not "the green thing to do", you have just made that part up.

wrf12345 said:

Incidentally, ofgem can't even be bothered to give the capped rates in the same form as they appear on bill 

That came about because the majority of the public seem to lack the ability to comprehend unit rates.

wrf12345 said:

the current capped rates is the only time in their existence that they have done anything remotely useful.

The current capped rates are in reality a bad thing, we will all pay in the long run, it is just being pushed into the future. Forcing a company to sell products below cost is never good for the market.

wrf12345 said:

My water bill has a standing charge but it is nothing like a £100 a year, but another thing that should go as it penalizes low users, though the wear and tear from water is much greater than gas or elect so perhaps they have a much stronger case.

The water network is cheaper per household to operate than the energy networks, hence lower standing charges. Standing charges do not penalise low users, they cover the base cost of the network provision, there not really any additional wear and tear in the small variance between individual users.

wrf12345 said:

I got the wholesale electric rate via google search so be interested to hear what it actually is if that info is misleading.

The wholesale cost is cheaper than what you pay because it does not include a lot of other costs which need to be included.

wrf12345 said:

Be interesting to see what would happen if everyone in the country turned their gas off at the meter in protest on April 1st - who would blink first? Cold showers are good for your health!

First the public are not that stupid, second the public would blink first, third, a mixed model of standing charges and unit rates make the most sense.

If you don't want to pay standing charges then take yourself off grid.

facade

wrf12345 said:

But the point is that we should all be using less energy so getting rid of standing charges is the Green thing to do

We are all trying to use less energy, but when you can't afford the massive investment to completely change a heating system, or to knock down your house and rebuild it more energy efficient with a ground source heat pump, there is only so much you can do apart from sit in the cold silent darkness for longer periods.

Rather like the comment I read from an unknown Government spokesperson along the lines of "If we reduce the VAT on gas it will encourage people to use more"  I would suggest that most people won't use more gas simply because it is cheaper, but because they are cold and can afford to use a bit more if it is less expensive....