Time to ditch the standing charge?

MattMattMattUK

Hysteron said:

Thrugelmir said

Which is only fair.  Until there's a system designed which is equitable to everyone.

You agree then that the system as it stands now is unfair as it is clearly not "equitable to everyone."

There is no "fair", because fairness is subjective. Would fair be everyone paying a fixed amount, a percentage of their income, their usage, an arbitrary assessment by "Hysteron"?

Hysteron said:

What is obviously fair is that you pay for what you use, that is true in everything else so why not energy? I don't get this "costs of infrastructure" since clearly, Sky didn't need a standing charge to bring Satellite TV into our homes or for Virgin to bring cable there, the standing charge is simply a way for the energy companies to guarantee a fixed return from the consumer even if they sell no energy at all. Nothing wrong with that as a way to do business but it absolutely is negative for the consumer for whom the standing charge forms a large proportion of their overall bill and it beats me as to why so many here speak up in favour of it.

People speak in favour of it because it makes logical sense. If you wish to be connected to the energy networks that has a cost, so you have to contribute towards that, if you are not connected to it then you would not. You also have to pay a unit cost because there is a generation/production cost associated with energy. Sky and Virgin do nominally charge a standing charge, their monthly fee. Because there is no additional cost to the majority of their content provision (eg they paid a fixed fee regardless of who watches it) then that is rolled in, but for content where there is a generation cost they are pay per view, people pay what they consume. 

Hysteron said:

When would the standing charge become an "unfair" cost? Might it be 60p/day or £2.60/day? There is a price at which the standing charge has to be too much and even 50p/day is a lot, 

It would ultimately depend on what the standing charge was set to cover, if the cost of network provision was £2.60 per day then that would be "fair". 

Hysteron said:
that price I'd suggest is too much when it becomes too large a % of a typical small users bill and they then are in effect subsidising those that can afford to use a lot more electricity them themselves.

You could suggest it, but you would be wrong, if the cost was to cover network provision and people were connected to the provision then as long as people are connected to the network and paying the standing charge then no one would be subsidising anyone. 

Hysteron said:

It's only now that charities and the like who are having to deal with the human fallout from these increases are looking more closely at the effects of these hikes in prices that things starting to be really noticed, hence the two reports out this week about it I think we are going to hear a lot more about these arguments in the immediate future and for a long while after that.

There will be arguments for some time, the charities are saying that low users should be subsidised, the major issue with that is low user does not mean poor, it can also mean has solar panels, owns a second home etc. There is an argument that people on low incomes need assistance due to the rise in cost of living, however rationally it does not make sense to do that through distorting the energy market, but through direct funding, an increase in benefits overall, some kind of COLA variable introduced to the benefits system etc.

savers_united

I have read alot of these standing charge posts on here and not one of them comes up with a solution that would be acceptable to everyone, that tells me that what we have currently is not perfect but the best in the circumstances.

No one is going to like a high standing charge, even high users for large parts of the year have their heating off, but still have to pay a daily charge when using next to nothing Gas.

But I guess those who shout loudest are the low users, and I get that, but it's not the energy providers, much of the SC costs are passed on through Gov't, if you are connected to the network you sign up to these obligations as a user.

There is little point comparing to other billing systems as these other industries are not capped or do not have green levies or social funds, talktalk and virgin are not told to sell their BB at a loss, or Shell told a maximum price they can sell diesel on their forecourt for six months of the year, if they were maybe they would introduce a connection fee each time you fill up.
No one forces you to connect your home to the network, there are always going to be winners and losers in some people's eyes.
I don't think so, with a SC we are all paying an equal amount, once that's out of the way then everyone can focus on how much energy they use, if you use less you pay less, use more you pay more. 

And just to reiterate other posts, low use often does not equal low income, so to use that as a marker to justify loading it onto the unit rate instead is very misguided. 
When you think of a working couple with no children could be out of the house a minimum 8 hours a day, away the weekend at ther Holiday home, compare that to someone unemployed, a pensioner, someone who needs care at home, a family with young children, they would get hammered, not because they waste energy but they have little choice in the colder weather whilst they spend large amounts of time at home. 

Astria

Hysteron said:

PennineAcute said:

My parents pay BT for a landline which is for emergency use only.  They use their mobiles for day to day use.  I think their line rental is £18 a month.

The idea of line rental of a telephone line is outdated but for now it is the main method for consumers to receive broadband access and in that case, then there has to be a payment due to the owner of the line no matter who supplies your internet access. Companies supplying broadband through cable such as Virgin do not charge line rental as the cost of their service is all-inclusive. Virgin users, therefore, have the option of getting rid of their phone line rental costs and using a mobile for calls.

If someone feels they must have a phone line solely for emergency calls then that of course is up to them and as I said the supplier of that phone line is entitled to charge for the use of it.

Note that there's one big use for a telephone line/landline compared to a mobile phone: emergency calls. For example, if you have fallen and are unable to speak, a mobile phone is no good, but calling 999 from a regular telephone will still get you an ambulance as they can tell exactly the address the call is coming from.

poppellerant

For me, standing charges cost me a little over £277 over the year, or around just over £23/pcm.  The standing charges make up around 20% of my total annual bill

So yes, I am inclined to say that standing charge prices are stifling right now and do indeed need to come down.  But I also understand that perhaps energy providers are using the standing charges to cushion supply costs.

pochase

Astria said:

Hysteron said:

PennineAcute said:

My parents pay BT for a landline which is for emergency use only.  They use their mobiles for day to day use.  I think their line rental is £18 a month.

If someone feels they must have a phone line solely for emergency calls then that of course is up to them and as I said the supplier of that phone line is entitled to charge for the use of it.

Note that there's one big use for a telephone line/landline compared to a mobile phone: emergency calls. For example, if you have fallen and are unable to speak, a mobile phone is no good, but calling 999 from a regular telephone will still get you an ambulance as they can tell exactly the address the call is coming from.

In a case like this a wireless alarm button would make more sense, some will automatically sending out an alarm when you have fallen , without a need to crawl to a the location of your fixed line. Of you need to have family / neighbours available who are able react to an alarm.

Marvel1

However everyone is not paying the same - prepayment meters pay more -  increase DD's payer's and lower prepayments to meet in the middle.

MWT

Marvel1 said:

However everyone is not paying the same - prepayment meters pay more -  increase DD's payer's and lower prepayments to meet in the middle.

The costs for those two payment methods are not the same though, the involvement of 3rd party processing agents for prepay make it a more expensive way to pay...