Electricity increases

Bocaeagle

We have all been hit by the increases of energy costs, or will be soon, and there is a point that I don't understand. If we are charged more for units of electricity or gas, due to increased costs from international supplies, why are the standing charges increasing so much? I though the standing charge was for the ability to supply (pipework, wiring,metering etc) and if this is the same how are the increases of 99% for electricity standing charge justified?

MWT

https://forums.moneysavingexpert.com/discussion/6337662/new-member-read-this-first-please#latest

Phlik

Bocaeagle said:

We have all been hit by the increases of energy costs, or will be soon, and there is a point that I don't understand. If we are charged more for units of electricity or gas, due to increased costs from international supplies, why are the standing charges increasing so much? I though the standing charge was for the ability to supply (pipework, wiring,metering etc) and if this is the same how are the increases of 99% for electricity standing charge justified?

This is being asked dozens of times per day, several times on this 1st page alone.

Operational costs.

30 companies have gone bust in last six months, that's part of the operational costs.

Smart meters aren't free, they're partt of operational costs.

Green initiatives aren't free, they're part of operational costs.

Robin9

Phlik said:

Bocaeagle said:

We have all been hit by the increases of energy costs, or will be soon, and there is a point that I don't understand. If we are charged more for units of electricity or gas, due to increased costs from international supplies, why are the standing charges increasing so much? I though the standing charge was for the ability to supply (pipework, wiring,metering etc) and if this is the same how are the increases of 99% for electricity standing charge justified?

This is being asked dozens of times per day, several times on this 1st page alone.

Operational costs.

30 companies have gone bust in last six months, that's part of the operational costs.

Smart meters aren't free, they're partt of operational costs.

Green initiatives aren't free, they're part of operational costs.

What you say @Philk is true but Smart Meters and Green Initiatives have been part of Operational Costs for the last 10 years or so. I don't think those costs have gone up significantly

The companies that went bust are the ones that pruned their costs to the bone (such that they were one man and a dog - sorry about the pun - efforts. 

wild666

18.6p of the electric standing charge increase is to do with firms going bust and the SoLR taking over. Don't expect the 18.6p to be taken off the SC any time soon,if ever, then there's the 11p to be added in October and that won't ever be taken off because it's more profit for the suppliers.
I bet if you asked any supplier to do a breakdown of their SC's there would be no mention of SoLR, the £200 or smart meters in their figures.

Phlik

Of the 30 suppliers that went bust only a few fall into that category. Utility supply in the UK is a very competitive market, profit margins around 2-5%, that doesn't give a lot of room to manoeuvre.
All 30 failed in quick succession and that was due to a sudden rise (400-500%) in wholesale prices which makes up around 40% of our bills. It wasn't the rise that was the issue it was a very poorly thought out and implemented cap by our government, a cap which had no mechanism to cope with a sudden price rise like we're seeing. The cap forces the utility suppliers to continue supplying whilst making huge losses, they are then forced to go bankrupt and those bankruptcy costs are then spread across customers bills, all the cap has done is guarantee that or bills will be larger long term than they would have been without the cap.

A number of industry insiders warned the government this could happen when they introduced the cap, it was ignored. The blame for our current situation should be laid squarely at the feet of our politicians along with continually kicking the can down the road in terms of being self sufficient for our energy needs.

MWT

wild666 said:

18.6p of the electric standing charge increase is to do with firms going bust and the SoLR taking over. Don't expect the 18.6p to be taken off the SC any time soon,if ever, then there's the 11p to be added in October and that won't ever be taken off because it's more profit for the suppliers.
I bet if you asked any supplier to do a breakdown of their SC's there would be no mention of SoLR, the £200 or smart meters in their figures.

Repeating this still doesn't make it true

The Ofgem capped figures cannot disguise the components of the standing charge so as long as they are set out in intricate detail in the public disclosures.

For all of the fixed tariffs, the standing charge is just a part of their competitive offering and as the capped variable tariff standing charges fall it will put pressure on the suppliers to reduce their prices or look uncompetitive.

cefylbach

I am now even more confused spoke to my electric company last night as my existing plan doesn't run out till15th April and was told that because the fixed plan prices are being changed nearly daily even I agree to a plan now it could still go up before it was activated in April but if I choose the variable plan now it would stay the same. Doesn't make sense to me.

[Deleted User]

Because of the uncertainty of energy prices, new fixed deals will be higher than SVT's at the moment. Suppliers don't want you to lock in a super cheap rates now.

As has been said above, the standing charges fund many elements along the electrical lines and to cover costs incurred by so many suppliers going down the pan. Think of it as more of a tax than a charge. 

[Deleted User]

Octopus Energy have agreed to let me keep my current fixed rate until it 'matures' in April then, as agreed, start their 10 months Loyalty Fixed rate.  This should give me some assurance of likely costs to almost the end of February 2023 - covering some of the heavy winter months.

It sounds as if your supplier is being less flexible, cefylbach. 

It is a very difficult time for all of us in so many ways just now - definitely far from easy.

Crimson

MWT

cefylbach said:

I am now even more confused spoke to my electric company last night as my existing plan doesn't run out till15th April and was told that because the fixed plan prices are being changed nearly daily even I agree to a plan now it could still go up before it was activated in April but if I choose the variable plan now it would stay the same. Doesn't make sense to me.

Which supplier is it?

There are two elements to this, which tariff you agree to and when it starts...

If you agree to a particular tariff the supplier can either start it immediately or agree to start it when your current fix expires.

They can't just change the tariff you have agreed to for a different tariff at the end of your fix.

So if the agent was saying they will not agree to start it at the end of your current fix, that is allowed, but it gives you the option to decide to change now to lock-in the price, or roll the dice on what will be available closer to the end of your fix.