Standing charge increased

MouldyOldDough

I have today lost the benefits of a fixed charge energy account - and have been put on a variable tarriff
The charges per kW have, not surprisingy increased by around 33%
But on what grounds have standing charges been increased by almost 100% on my energy account? 
Surely - they can't claim that the cost of transporting the energy has doubled? 

Curiousgirl1

Your fixed tariff will have had an artificially low standing charge & now you’re on the standard variable it will have gone up to the current price cap rates 

molerat

Daily charge does not only cover the transportation costs, all the fixed costs and levies are in there but on a fixed deal the suppliers had the ability to mess around to get the best outcome.  OFGEM includes these in the capped prices so now the suppliers are taking full advantage of that.  If you think it is bad now wait until April when it will almost double again.  Last year I was paying 10p, currently 27p and from April 50p !

wrf12345

The variable rates are capped until end of March, from April they go up by an average of 54 percent BUT standing charge for electric is doubling in some regions, so if you are a low user chances are you will have doubled up from your fixed rate, some are three times as high as a cheap fixed rate that has finished recently. Ofgem have let low user down badly.

MWT

MouldyOldDough said:

I have today lost the benefits of a fixed charge energy account - and have been put on a variable tarriff
The charges per kW have, not surprisingy increased by around 33%
But on what grounds have standing charges been increased by almost 100% on my energy account? 
Surely - they can't claim that the cost of transporting the energy has doubled? 

If you'd like to put some numbers on it we can let you know if anything looks wrong with your new charges, but the odds are the problem is just that your old fixed tariff had really low standing charges, well below the cap, and you are just now catching up with reality...

On a fixed tariff, the supplier can decide to reduce the standing charge and recover their costs through the kWh charge so the standing charge becomes a competitive positioning charge. With the capped variable tariff they need to set the standing charge close to the cap or risk losing even more than they are already doing by selling below cost.

The real pain is still to come though as from April the standing charge for electricity will have a large element to cover the SoLR costs added to it...

QrizB

MouldyOldDough said:

Surely - they can't claim that the cost of transporting the energy has doubled? 

As Curiousgirl1 says, on your previous fixed tariff the standing charge was artifically low.

And it probably still is, even on your new tariff. If you look at Ofgem's figures, of the £1277 a typical user spends for energy on the current cap, only £554 (ie. £528+VAT) is the cost of energy; the other £723 is made up from unrelated costs.

You could make the case that the standing charge should be closer to £1/day/fuel, rather than 25p.

Briskly

Can someone please explain why there are no standing charges on fuel bills in the USA,  for example, in addition to much lower unit costs. It can't all be the price of gas surely?

MWT

Briskly said:

Can someone please explain why there are no standing charges on fuel bills in the USA,  for example, in addition to much lower unit costs. It can't all be the price of gas surely?

Different market, different cost structures and different pricing models.

I can't speak for the whole of the USA but in Dallas for example we have an electricity account which is based on net metering, but you do still have to pay the network costs for delivery of the power, so it isn't as simple as deducting exported solar from import to get your cost, but in general the network delivery costs are proportional to the kWh so it makes less sense to have a standing charge.

MouldyOldDough

MWT said:

MouldyOldDough said:

I have today lost the benefits of a fixed charge energy account - and have been put on a variable tarriff
The charges per kW have, not surprisingy increased by around 33%
But on what grounds have standing charges been increased by almost 100% on my energy account? 
Surely - they can't claim that the cost of transporting the energy has doubled? 

If you'd like to put some numbers on it we can let you know if anything looks wrong with your new charges, but the odds are the problem is just that your old fixed tariff had really low standing charges, well below the cap, and you are just now catching up with reality...

On a fixed tariff, the supplier can decide to reduce the standing charge and recover their costs through the kWh charge so the standing charge becomes a competitive positioning charge. With the capped variable tariff they need to set the standing charge close to the cap or risk losing even more than they are already doing by selling below cost.

The real pain is still to come though as from April the standing charge for electricity will have a large element to cover the SoLR costs added to it...

Its Octopus

was

ie) Electricity 15.34p per kW + 14.21p per day

Gas 2.87p per kW +  14.98p per day

now

Electricity - 20.49p per kW + 24.11p per day

Gas - 4.13p per kW + 26.11p per day

My DD was for £40 per month - so the Standing charge makes quite a difference

QrizB

Briskly said:

Can someone please explain why there are no standing charges on fuel bills in the USA

Why do you think there are no standing charges in the USA?

According to https://blog.arcadia.com/understand-charges-on-utility-bill/ :

Utilities often tack on other fees associated with electricity service and delivery. These fees can be for a variety of things, but many utilities commonly have a distribution service charge, a grid connection fee, late fees, and a low income assistance fee. All of these fees are broken down on your bill and added up to give you a grand total every month.

See also eg. https://news.energysage.com/how-to-read-your-ladwp-electricity-bill/ where it explains the other charges:

... you can find all of your electricity charges broken up by tier in the aptly named “Electric Charges” section of your bill. In general, what you pay for electricity can be categorized into three separate buckets: supply, distribution/transmission, and miscellaneous. These rates cover the electricity you use, getting the electricity to your home or business and any other charges and fees related to the maintenance of the grid.

QrizB

Now this is interesting (well, it is to me): at least in LA, there's a "power access charge" which is higher for higher users. The more energy you use in a month, the higher your standing charges are.

http://rates.ladwp.com/UserFiles/PAC_Explained.pdf