Standing charge

pochase

TC56_803_9 said:

GingerTim said:

The standing charge will go up further in October to pay for the loan-not-loan of £200 which everyone is due to receive.

Is there any way of opting out of it without still paying for everyone else?

There is no way to opt out, this has been discussed in depth. 40£ per year will be added to the standing charges for electricity for the next 5 years, no matter if you even received the money or not. If you have electricity during this 5 years, you will pay back the "loan".

The part of the standing charge for the SOLR process should not be there forever, it is to recover the money spend on the process, administration costs of the new supplier, but also to save the credit users had with there energy suppliers. 

@montybell1
There are also several discussions why it is added to the standing charges and not to the unit price, it is just the most fair as it is like an insurance, everybody has to pay equally for it. Anyway, it is the way it was done, nothing anybody can do about it.

TC56_803_9

pochase said:

 1) administration costs of the new supplier, but also to 2) save the credit users had with there energy suppliers. 

It would be very interesting to know what the companies are able to charge for (1).  I understand customers are allocated new suppliers on a tender process.  What is the going rate for the admin costs ?  The swap sites made no charge but obviously simply amortised it over the charges of the first few months. 

QrizB

TC56_803_9 said:

pochase said:

 1) administration costs of the new supplier, but also to 2) save the credit users had with there energy suppliers.

It would be very interesting to know what the companies are able to charge for (1).  I understand customers are allocated new suppliers on a tender process.  What is the going rate for the admin costs ?  The swap sites made no charge but obviously simply amortised it over the charges of the first few months. 

The "swap sites" were paid a sign-up bonus by some or all suppliers. That's not related to the costs of administering an account and buying energy for that user on the open market while being obliged to sell it at a lower capped rate.

All of this has been discussed at length previously. Those discussions can be found via the search function, or via Google if you prefer.

Here's a thread to start you off:
https://forums.moneysavingexpert.com/discussion/6314146/millions-of-taxpayers-cash-to-keep-bulb-going

TC56_803_9

TC56_803_9 said:

pochase said:

 1) administration costs of the new supplier, but also to 2) save the credit users had with there energy suppliers. 

Ok So many thanks.  So points (1) & (2) above are fixed Infrastructure is fixed and only green is a % levy which is unchanged at the change point of the cap?  So that would mean two fixed charge additions per customer.  So my electricity only standing charge has gone up by 23.31 so I presume everyone on a electricity only tariff will also have seen an identical increase.

Only I am not confident that will be the case. 

After all 23 - 16 = 7p on green levy and infrastructure on 25 p last period is a 28% increase alone.  One hell of a lot of cables to be renewed there! 

Thrugelmir

TC56_803_9 said:

pochase said:

 1) administration costs of the new supplier, but also to 2) save the credit users had with there energy suppliers. 

It would be very interesting to know what the companies are able to charge for (1).  I understand customers are allocated new suppliers on a tender process.  What is the going rate for the admin costs ?  The swap sites made no charge but obviously simply amortised it over the charges of the first few months. 

One would assume that the regulator agreed with the companies concerned a per customer charge. Not as if they had the capacity on tap to manage the new customers being transferred. Would have required recruiting new staff and training them. 

TC56_803_9

Thrugelmir said:

One would assume that the regulator agreed with the companies concerned a per customer charge. Not as if they had the capacity on tap to manage the new customers being transferred. Would have required recruiting new staff and training them. 

Yes and once it was looking tough and the only players left at the table were those with the huge back up,  who could ride it out - whatever the conditions, how many were actually bidding ?  Once you are down to 2 - 4 it is going to be time to exploit the situation.  I can't see the regulator wanting to publish the trend from spring to now in terms of what they had to settle for.

agentcain

pochase said:

The part of the standing charge for the SOLR process should not be there forever, it is to recover the money spend on the process, administration costs of the new supplier, but also to save the credit users had with there energy suppliers. 

Credit that consumers had already transferred onto the supplier's bank accounts, credit that should be still available. Most suppliers however went bust well ahead of winter, just when most customer's account was in credit. If the credit was never available and the suppliers operated on a credit promise, we've just found what's wrong with the energy supply.

Montybell1

This is reply shell energy sent me about standing charge increase, 
Hello,

Thank you for taking the time to get in touch with us; here at Shell Energy we strive to offer exceptional customer service and aim to resolve all queries as swiftly as possible and to the best of our ability.
 
We apologise for the inconvenience or any stress this matter may have caused you. 
 

However, a standing charge is a fixed daily amount that’s applied to your bill. 

 

The charge is based on the costs suppliers pay for providing your home with energy. 

 

It includes the operating and network costs we have to pay the companies who own the wires and pipes that carry your energy.

 

This year their charges have increased by 39%. The standing charge also includes a levy of £68 per household per year. 

 

This amount is set by Ofgem, the UK’s energy regulator, to recover costs associated with the collapse of 29 energy suppliers this past year. This is known as the Supplier of Last Resort levy.

 

Wholesale energy costs account for a large part of your bill (around 35%), while there are also things like network costs (pipes, wires, etc), operating costs, taxes, and VAT to consider.

 

What this means is that when the markets change significantly, our prices need to adjust as well.

 

We work hard to keep our costs low so we can absorb as many of these costs as possible. But, unfortunately, the latest increase in wholesale prices has been so significant, we’ll have to increase our rates in line with the new price cap.

 

There are a number of reasons wholesale energy prices have increased around the world. These include a cold and longer than usual winter last year that put pressure on supplies, high demand in Asia, and increased dependence on gas imported from international markets.
 
Please see attached link for more information about the price cap which OFGEM sets: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you