STANDING CHARGES STEALTH TAX

SAC2334

pochase said:

No supplier is forced to charge you a standing charge. If they don't charge it to you they have to pay it out of their pocket.

So you only have to find a supplier who does not charge a standing charge and your problem is solved. Only one that comes to my mind is Utilitia. Of course they charge higher unit rates, they add 50% of the daily standing charge to each of the first 2 KWh. 

So if your usage is below 2KWh per day you have a winner. Might work out nicely with gas if you don't use any gas in summer.

The standing charges are not just for your meter. 

Other things, better main things covered by the standing charges

• maintaining the energy networks, wires, and pipes that carry gas and electricity to your home 
• connecting your home to the energy network 
• conducting meter readings.
• cost of SOLR process (electricity only)

That is how the prepayment meters used to work where occupiers could choose if they wanted a standing charge or no standing charge  tariff . Most selected "no standing charges " of course .

There was never ever any further info from suppliers that the standing charges would be paid anyway in higher unit prices for a certain number of units used per quarter.
It made it quite complex to understand the system .One thing was certain though is that everyone paid a standing charge 

Section62

MattMattMattUK said:

Section62 said:

MWT said:

If only we had all realised sooner that the standing charge only paid for the meter and nothing else such as the rest of the national grid, the social charges for things like the Warm Home Discount, the protection of customer balances at the failed energy suppliers etc. etc. ... 

Do please read the explanations about the standing charge at the top of this group then think again...

To be fair to the OP, it is the CSA at the energy supplier who needs to read the explanations and think again...

Customers should be able to rely on the accuracy of the information energy companies give them.

I am not sure the now defunct Child Support Agency will be much help

The information is provided by energy providers and that is standing charge and unit charge. Technically, according to their license they do not need to charge either a standing charge or a unit rate, or even charge at all, although they would go bust very quickly if they did not. 

As usual with these kind of people the OP completely misunderstands the standing charge, the regulatory framework and the nature of trying to run a profitable business.

The OP said they spoke to their energy company - I'm assuming it was a Customer Service Agent - who gave them the incorrect information about what the standing charge pays for.

If "these kind of people" means people who've been misadvised by poorly trained staff working in call centres then it isn't surprising they misunderstand the standing charge and feel somewhat cheated.

Section62

DE_612183 said:

meters need to be recertified on a regular basis - I vey much doubt it's over 37 years old.

What the regulations say, and what happens in practice, aren't one and the same.

I have no doubt the OP's meter could be more than 37 years old.  I have personal knowledge of one which was last certified 36 years ago and is still in use (and recording accurately).

DE_612183

Section62 said:

DE_612183 said:

meters need to be recertified on a regular basis - I vey much doubt it's over 37 years old.

What the regulations say, and what happens in practice, aren't one and the same.

I have no doubt the OP's meter could be more than 37 years old.  I have personal knowledge of one which was last certified 36 years ago and is still in use (and recording accurately).

Section62 said:

DE_612183 said:

meters need to be recertified on a regular basis - I vey much doubt it's over 37 years old.

What the regulations say, and what happens in practice, aren't one and the same.

I have no doubt the OP's meter could be more than 37 years old.  I have personal knowledge of one which was last certified 36 years ago and is still in use (and recording accurately).

Used to be different in my day - the old electricity regulator would fine companies who had a % on un-certified meters in play.

epsom

To all (or most) of those who replied....

Seems you are all quite happy with the fact that you pay a standing charge (which is not related to the ENERGY cost--although the standing charge goes up anyway).

The person who said that it goes towards "maintaining the energy networks, wires, and pipes that carry gas and electricity to your home"..... well, no---that is the responsibility of the National Grid. 

Have a look at the profits ( despite increasing wholesale prices) that the energy companies make---particularly the larger ones.
Anyone going to tell me that in these times of hardship that they cannot do away with the standing charge?. 

""Energy regulator Ofgem ruled that energy tariffs no longer need include a standing charge following recommendations by the Competition and Markets Authority back in 2016. However, the vast majority of energy suppliers continue to add them as part of the overall energy cost.""

In other words, the ENERGY companies themselves add them--even though they are NOT a legal requirement---and they discriminate against low users.
I use very little gas---and have built up a huge debt in standing charges alone for the gas.
I would much rather pay more per unit than have a standing charge----then I know that I pay for what I use.

It may not be a scam--but it IS a stealth tax by any other name.

I would predict that the first energy company to do away with standing charges would see customers FLOCK to them.

What_time_is_it

"I would predict that the first energy company to do away with standing charges would see customers FLOCK to them."

You may be right. However, I also imagine that it would be little more that a marketing device and that it would be accompanied by higher unit rates. Some may also call this method "stealthy" as lots of people struggle to understand how their bills are calculated. I would be very suspicious of any company that was pushing a zero standing charge 

DE_612183

where do you think the National Grid gets it's money from? - The Energy Suppliers.

You are right they don't have to apply them - but the revenue recovered from "users" would be the same.

If the SC did not apply, then there is a case that it would discriminate against higher or normal users - why should a low user make less of a contribution to the distribution network as a whole?

It can't really be a tax, as very little of it gets to the government ( vat 5% ), and as I said before the turnover of the company would need to be the same anyway to absorb the costs - so there would actually be no change to the amount of money the government gets from the price or s/c.

DE_612183

"I would predict that the first energy company to do away with standing charges would see customers FLOCK to them."

Possibly, but it would only be the low usage customers, as any normal or higher usage customers would not want to pay higher bills due to the increased unit charges.

epsom

DE_612183 said:

meters need to be recertified on a regular basis - I vey much doubt it's over 37 years old.

and that doesn't alter the fact that the premiss of your argument is totally flawed. 

Money from S/c goes towards the distribution costs - provided by companies other than your supplier anyway.

The Meters (Certification) Regulations 1998 (legislation.gov.uk)

You work for the energy companies do you?.

You need to be careful implying that I am lying or am mistaken etc..... I am telling you that the meter I had up until recently ( I now have smart meters) had never been replaced.
If it had been re-certified, then once in 37 yrs is, er, not often...... ( and not to my knowledge).

Don't talk to me about "regulations" (which you show a link to)---read what I actually say about the legality of a standing charge---there IS NO legal requirement for them.
Any pipes that are broken outside of the home are not the responsibility of the energy company---that is the responsibility of the national grid..... ever heard of them?.

Don't try to make excuses for the energy companies---there is no excuse---ESPECIALLY for them hiking the SC when the ACTUAL fuel cost is going through the roof.

EssexHebridean

I confess I'm not aware of any stampede of people heading to Utilita - nor was I one of millions when I was with Ebico on their Zero SC tariff for several years...

It's not that I am "happy" to pay a standing charge for my 270kWh of gas used per year - more that I do understand that the gas I do use, little as it is, isn't magically transported to my cooker by fairies blowing it through the air for free...in the same way as there are costs relating to the electricity network, the water infrastructure etc. In the same way I also understand that a proportion of the cost of the items I buy in the supermarket covers the costs involved in those items production, and the transportation to get them to the store, as well as that store's own operating costs...

The SC is far from a "Stealth tax" - for two reasons - first it's not a tax, and second, it's not very "stealthy" allowing that it is clearly visible to everyone!