Electricity and gas standing charges - petition

oliver1951

I feel that standing charges are regressive and the calculation is opaque. I would like to see standing charges removed and added to the per kWh charge. This should be based on total cost divided by total kWh consumed to give a cost per kWh. Until 2013 I didn’t pay any standing charges and my energy costs were £200 pa. Now I pay around £200 pa just for the standing charges, which represent 25% of my fuel bill. And yes I am miserly on my fuel use. Standing charges are particularly onerous for people of limited financial resources and they also penalise those people trying to lessen their usage to lessen their co2 footprint. The heaviest users end up with the lowest kWh pricing, which seems wrong. I have started a petition and I need some support to try and take this to the gouvernement and ofgem. If you feel that this is something you could support you can find the petition on change.org.  I’m not allowed to post a link apparently and unfortunately without the link I don’t know how to get you to the petition. It’s there, but even though I put in a full search of the petition title, it doesn’t appear. Odd . 

Thanks . Look forward to hearing your thoughts

QrizB

oliver1951 said:

Thanks . Look forward to hearing your thoughts

OK, here goes.

I feel that standing charges are regressive and the calculation is opaque.

What suppliers choose for their standing charges is their business decision. That is intentionally a well-guarded process.

How Ofgem sets the cap for the standing charge, however, is entirely transparent. All the data they use is published at https://www.ofgem.gov.uk/master-publications-library for the world to see.

Until 2013 I didn’t pay any standing charges and my energy costs were £200 pa.

That was not solely because you had an energy supplier who chose not to have a standing charge; energy was cheaper then. I was paying 10p/kWh for electricity in 2013.

Now I pay around £200 pa just for the standing charges, which represent 25% of my fuel bill.

So your bill is now £800 per year, of which £600 is energy charges? I suggest that you are using far more energy now than you were in 2013.

Standing charges are particularly onerous for people of limited financial resources ...

The main beneficiaries of zero standing chage tariffs are owners of second homes and holiday properties, people who are unlikely to be "of limited financial resources".

... and they also penalise those people trying to lessen their usage to lessen their co2 footprint.

Each kWh of electricity you *didn't* use in 2013 would have saved you about 10p. If you're on a capped tariff, each kWh you *don't* use today saves you 21p and, come April, each kWh of electricity you *don't* use will save you 28p. Thast seems to me to be quite strong encouragement to reduce your energy use.
All that aside, there is a cost to your supplier & the network operators for providing your connection to the grid. It seems quite reasonable for that cost to be recovered from the account holder.

PennineAcute

SC just make up part of the total cost.  Price per kWh does not matter, what matters is the total cost.  I am a low user, so fall into the people who you think are suffering - and I do not think I am.  My SC is just over 24p and my UP is just over 22p.  So in theory, I am just being charged an extra kWh per day.  My SC for Gas is 26P, with a UP of 5.4p, so am just being charged just under an extra 5 kWh a day.

If we reduce the SC and increase the UP, then is it fair that high users take a hit?  The only fair way is to remove SC and incorporate it into the UP, but all companies - besides Utilita - have decided that this does not work.  Utilita charge a higher rate for the first two units of gas and electricity, and then charge a lower rate for the remainder of the units used.  This still affects low usage users more than high usage users.

My parents have a landline, but very rarely use the phone.  They have it for emergencies only.  Therefore, they are affected more than someone who uses their phone more frequently - because of the line rental aka standing charge.

Thrugelmir

PennineAcute said:

My parents have a landline, but very rarely use the phone.  They have it for emergencies only.  Therefore, they are affected more than someone who uses their phone more frequently - because of the line rental aka standing charge.

The infrastructure needs to be maintained whatever the actual usage. 

PennineAcute

Thrugelmir said:

PennineAcute said:

My parents have a landline, but very rarely use the phone.  They have it for emergencies only.  Therefore, they are affected more than someone who uses their phone more frequently - because of the line rental aka standing charge.

The infrastructure needs to be maintained whatever the actual usage. 

I agree.  You want something, you have to pay for.  They want a landline and they do not complain about having to pay a line rental.

Whatever method is used to charge, some will benefit and some will not.

400ixl

Essentially you are saying you want others to subsidise you.

Part of the cost base does not change just because you use less. The infrastructure still has to be supplied and maintained, the grid needs investment into new power sources, the operators still have overheads to cover.

Now, there should be more transparency and each regional network should have a cost per supply which should be the same to all suppliers.

That then leaves the suppliers costs to be apportioned which makes the standing charge.

EssexHebridean

I’m a ludicrously low user of gas. Until last year we were always able to find and get onto zero standing charge tariffs. Now those are no more, and as a result our gas bill is roughly 4 times what it was - and that will only go up now as we’re well aware. In spite of this, I don’t have an issue with the SC - and going forwards I suspect it will be the difference between companies being willing to take on our supply, and not. The zero SC tariffs were always on borrowed time - we took the advantage knowing that at some stage that would stop. Ultimately, the supply does still have to be got to our property with all the attached expenses that entails - is it unreasonable we pay a share of this? Nope. 

oliver1951

Thanks to all of you for your comments. Clearly you all prefer sc to inclusive kWh pricing. I am aware of the ofgem pages, but will review again, as to me it was opaque. I note no-one picked up on the issue of higher consumers and the co2 issue. I will be interested to see if other replies continue this theme. Kind regards to all responders.

PennineAcute

The only thing that will cut co2 energy emissions is the reduction in use of energy.  When prices are high, as they are now, people start thinking - but IMO, not to cut emissions but to cut costs.  I am quite enjoying listening to radio 4 and radio 5 and it costs less than having the TV on.  If I had known how wicked The Archers was, I would have started listening a long time ago.

Verdigris

I note no-one picked up on the issue of higher consumers and the co2 issue.

Allow me. I used to be of the opinion that "all in one" tariffs were fairer, in that you contributed proportionally, to the grid infrastructure, according to your consumption. Let the polluter pay, in other words. However, the most profligate users also tend to be second home owners, who would pay nothing, on their holiday homes, most of the time.

More equitable would be higher taxes on the wealthy, as they tend to be higher consumers; higher VAT on wasteful goods like hot-tubs, ostentatious cookers, American fridges etc.

There's never going to be a perfect answer.

markin

We are all equally paying to cut co2 by the SC, And as it becomes green they aren't anymore the bigger polluters so why should they pay more, Going Green isn't cheap we should all pay for the grid upgrade.