STANDING CHARGES STEALTH TAX

Jyana

epsom said:

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. 

The National Grid: who are they and what do they do?

...it depends on where you live as to which company distributes your energy. These companies own the distribution network that connects households to the Power Grid. 

Distribution companies charge suppliers for using the network. Suppliers then pass this cost on to consumers through the standing charge on your energy bills. Because there are different distribution companies in each region, energy costs can vary depending on location. It also means that the price cap is different depending on the region you live in.

Ofgem’s role in energy supply and distribution is to make sure the market is fair for consumers because there is no competition to keep the costs low.

Section62

DE_612183 said:

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

And that %age allows there to be a large number of old meters still out in the wild.  Which is why the OP's 37 years is entirely plausible.

epsom

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.

I know exactly what the standing charge is for, so don't imply I misunderstand it, Matt.
I suggest you read my other replies on this post and think again.

To those suggesting that NOT having a standing charge would discriminate against high users, then so be it----at least they would KNOW exactly what they pay for in USAGE costs---and if that meant a higher unit cost, so be it.
I would much rather pay a higher unit cost than paying for something I do not use that often (in my instance, gas).

epsom

DE_612183 said:

"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.

Yes----so you make my point for me----low users are discriminated against.

Section62

DE_612183 said:

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?

Because people who use less energy make less demand on the network, in particular when it comes to issues such as network capacity upgrades and generation capacity mechanisms.

If we all reduced the amount of energy we used then there would be fewer capacity issues that need money to be spent on.

Also, given concerns about environmental impacts, it would be justified from a policy perspective to 'reward' consumers who use less energy through lower or discounted prices.  High standing charges are the opposite of what is needed to get people to reduce the amount of energy they consume.  If anyone feels this would be unfair, I would point them to the special rates and/or rebates offered to people who are very low users of water, telephones etc etc.

EssexHebridean

Just a hint - taking an aggressive tone with other forum members who are trying to be helpful doesn't tend to go down terribly well... 

epsom

TheMilkmansDad said:

Suggest OP doesn't pay that element of his bill, see how they get on....

Don;t be silly, Milkman----that's not an option now is it.
You fail to understand my point.

Uxb1

Welsh water charges £135 per year standing charge (that's the supply standing charge and the sewage standing charge added together)
So at £11.25 pm rather than being small as per the OP its actually larger than their example of £10pm

Phone line rental is a standing charge.  Actually in the early days of landlines those house further away from the exchange paid a higher rate of line rental representing the higher costs of repairs etc on their longer line.

now I live in a rural area and the number of times I've been off electric is endless.  I expect to be off a few times a year. I very much doubt my standing charge is going anywhere near paying for even one repair.

I did once work out the cost of a phone telegraph pole and Junction.box replacement outside my house serving 4 houses. I recall the cost would have wiped out the telecoms profits arising from those 4 houses for something like 7 years.

DE_612183

you work for the energy companies do you?. - I ues to yes - many moons ago.

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?. Yes.

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. Not an excuse - just an explanation, you make a simplistic argument as if you were the fist person to think of this - you are not and the point you have made has been answered many times.

Not everyone will be happy with the way tariffs are structured - but that's why competition was introduced, although it's not as successful as it once was.

What_time_is_it

@epsom - If you are arguing for greater simplicity and clarity in billing then I totally agree with you. The energy market is overly complicated, understood by very few people, and deliberately opaque when it comes to explaining the price. Reform is long overdue and I would agree that obligating ALL suppliers to simplify their pricing structure, abolish standing charges, and move to a more straightforward unit price would be a very good move that would favour those most in need.

However, I don't think that this can be done on a supplier by supplier basis. The whole market needs greater simplicity, and I fear that companies would just use your approach as a marketing tool to get new customers and lock them in on a higher unit charge than they need to pay. 

In short, as part of new tighter industry-wide regulations to simplify pricing I would definitely support the abolition of standing charges.

PS - take it easy dude!