Standing charge increase explanation (and why it doesn't seem to make sense)

Ultrasonic

agentcain said:

Gas prices going up when there's extended consumption and a war by a nation that has always been war friendly?

The April standing charge rises are nothing to do with the war in Ukraine, since the price cap calculation was for the period prior to the invasion. October's price cap increase will be affected, although I suspect more in terms of the unit price than standing charge.

FeaturelessVoid

QrizB said:

FeaturelessVoid said:

Prior to last year, I don't think any SoLR actually claimed from Ofgem at all

Before 2021 there were SoLR cost claims from:

• OVO for Cardiff Energy
• EDF for Solarplicity
• OVO for Brilliant Energy
• Shell for Usio Energy
• OVO for Spark Energy
• Together Energy for OneSelect
• Octopus for Iresa

... and there might be others; I stopped looking once I'd found seven!

The Octopus / Iresa claim resulted in a levy on customers via the supply networks.

So minimal in the grand scheme of things.

If the first thing that happens when it all goes twits up is to whack another 14p on Standing Charges, it's been horribly mismanaged.

But, as we have apparently learned lessons from the current crisis, why do we need to up the price that consumers pay to fill the pot that won't be used again?

MWT

FeaturelessVoid said:

QrizB said:

FeaturelessVoid said:

Prior to last year, I don't think any SoLR actually claimed from Ofgem at all

Before 2021 there were SoLR cost claims from:

• OVO for Cardiff Energy
• EDF for Solarplicity
• OVO for Brilliant Energy
• Shell for Usio Energy
• OVO for Spark Energy
• Together Energy for OneSelect
• Octopus for Iresa

... and there might be others; I stopped looking once I'd found seven!

The Octopus / Iresa claim resulted in a levy on customers via the supply networks.

So minimal in the grand scheme of things.

If the first thing that happens when it all goes twits up is to whack another 14p on Standing Charges, it's been horribly mismanaged.

But, as we have apparently learned lessons from the current crisis, why do we need to up the price that consumers pay to fill the pot that won't be used again?

There is no 'pot' to fill, when costs occur they are mutualised and recovered from those with energy accounts, so it doesn't matter what lessons are learned, if there are significant costs to be recovered a noticeable change in the standing charge will occur, this is the system working as intended.

Ultrasonic

FeaturelessVoid said:

If the first thing that happens when it all goes twits up is to whack another 14p on Standing Charges, it's been horribly mismanaged.

But, as we have apparently learned lessons from the current crisis, why do we need to up the price that consumers pay to fill the pot that won't be used again?

You've got this completely backwards. There isn't a 'pot' and if the suppliers hadn't gone bust then there wouldn't be the standing charge increase. Think of this as paying to clear a debt rather than paying into a rainy day fund.

Hysteron

The exact same amount of income for the energy companies raised through the standing charge could also be raised by increasing the standard kWh rates by an appropriate amount. The standing charge is most unfair on the smallest of electricity/gas users who are in effect subsidising the larger users.

The make up of the total income for the energy companies is immaterial, all that matters to them is that the same amount of income is raised through their pricing structure, this does not require that a standing charge be applied, they just choose to do it that way is my opinion.

Ultrasonic

Hysteron said:

The exact same amount of income for the energy companies raised through the standing charge could also be raised by increasing the standard kWh rates by an appropriate amount. The standing charge is most unfair on the smallest of electricity/gas users who are in effect subsidising the larger users.

I think the logic is that everyone benefits from the SOLR protection and so everyone should pay equally for this. The way to do so is via the standing charge rather than the unit price.

I am a low energy user and benefited from the SOLR protection when Pure Planet went bust and don't personally think the standing charge increase is an unfair way to do this.

MWT

Hysteron said:

The standing charge is most unfair on the smallest of electricity/gas users who are in effect subsidising the larger users.

The make up of the total income for the energy companies is immaterial, all that matters to them is that the same amount of income is raised through their pricing structure, this does not require that a standing charge be applied, they just choose to do it that way is my opinion.

The standing charges represent costs that are nothing to do with consumption, so how is it 'fair' to increase the proportion of those costs just because there is higher consumption?

Remember that not putting it onto the standing charge benefits those with second homes, and disadvantages those on low to middle incomes with disabilities, age related conditions or other special needs requiring them to use more than average amounts of energy...

FeaturelessVoid

Ultrasonic said:

FeaturelessVoid said:

If the first thing that happens when it all goes twits up is to whack another 14p on Standing Charges, it's been horribly mismanaged.

But, as we have apparently learned lessons from the current crisis, why do we need to up the price that consumers pay to fill the pot that won't be used again?

You've got this completely backwards. There isn't a 'pot' and if the suppliers hadn't gone bust then there wouldn't be the standing charge increase. Think of this as paying to clear a debt rather than paying into a rainy day fund.

So what is the SOLR levy for, if not a pot to dip
into?

Marvel1

Shame the standing charge is more for those on a prepayment meter - most are on one for a reason.

FeaturelessVoid

Marvel1 said:

Shame the standing charge is more for those on a prepayment meter - most are on one for a reason.

Because it's not doing what its supposed to for anyone, let alone those NOT on prepayment meters.

I'm stlll waiting for an answer as to what has happened to the the pot we've been paying into for the last few years, but I suspect I won't get a coherent one.