STANDING CHARGES STEALTH TAX

epsom

EssexHebridean said:

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... 

I am not taking an aggressive tone (if you mean me)---but I will not have someone imply that I do not understand what I am talking about. In that case, I will defend myself.
I am all for reasoned debate, but not subtle insinuations.

epsom

Section62 said:

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.

Thank you, Section62---at last someone who can see my point somewhat.

pochase

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 money needed by National Grid to maintain the infrastructure is collected with the standing charge by the suppliers and paid over to National Grid.

Section62

pochase said:

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 money needed by National Grid to maintain the infrastructure is collected with the standing charge by the suppliers and paid over to National Grid.

So is that money ring-fenced within the standing charge and handed over pound-for-pound to National Grid?

Or do the suppliers just collect a big pot of money from customers, out of which they pay a levy which funds National Grid?

I think this is where a lot of the cofusion arises.

MattMattMattUK

epsom said:

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.

If you, as you claim, understand what the Standing Charge is for, then why do you feel you should not pay for the costs of the network etc.?

epsom said:

I suggest you read my other replies on this post and think again.

I have read your other replies, they do not make rational sense.

epsom said:

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 know exactly what I pay because it is still very basic, there is a daily charge (Standing Charge) and a charge based on usage, that should be understandable by any mentally competent adult.

epsom said:

I would much rather pay a higher unit cost than paying for something I do not use that often (in my instance, gas).

The Standing Charge is to cover the network costs, those exist because you are connected to the network. If you do not wish to contribute towards the network then have yourself disconnected from it and use Calor Gas (or similar). That will give you what you want in terms of no standing charge, although it will cost you more overall, but as you have said you are happy to pay a higher unit cost/cost per kWh then it would seem to be the best option for you.

What_time_is_it

"I know exactly what I pay because it is still very basic, there is a daily charge (Standing Charge) and a charge based on usage, that should be understandable by any mentally competent adult."

I don't think this is case. I am sure that vast majority of people do not really understand their energy bills. They are deliberately made to be confusing, hard to compare, and overly complicated. Terms such as SVR, standing charges, kwhs, price cap, energy regulator, etc are not properly understood by most people.

Regardless of whether you think standing charges are fair or not, there is clearly a strong case for enforcing a simplified pricing structure that priorities clarity.

epsom

pochase said:

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 money needed by National Grid to maintain the infrastructure is collected with the standing charge by the suppliers and paid over to National Grid.

So why is it that """Ofgem ruled that energy tariffs no longer need include a standing charge following recommendations by the Competition and Markets Authority back in 2016.""?.

If the money was required and needed by the National Grid to maintain the infrastructure, then Ofgem would have made the standing charge a requirement----but it is NOT a requirement.

Come on everybody-----customers are being ripped off left right and centre, so stop with all the cow towing to the energy companies who already make a fortune from us.
I suggest you all look at the recent profits that most energy companies are making right now---and it's a LOT.

epsom

MattMattMattUK said:

I know exactly what the standing charge is for, so don't imply I misunderstand it, Matt.

If you, as you claim, understand what the Standing Charge is for, then why do you feel you should not pay for the costs of the network etc.?

epsom said:

I suggest you read my other replies on this post and think again.

I have read your other replies, they do not make rational sense.

epsom said:

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 know exactly what I pay because it is still very basic, there is a daily charge (Standing Charge) and a charge based on usage, that should be understandable by any mentally competent adult.

epsom said:

I would much rather pay a higher unit cost than paying for something I do not use that often (in my instance, gas).

The Standing Charge is to cover the network costs, those exist because you are connected to the network. If you do not wish to contribute towards the network then have yourself disconnected from it and use Calor Gas (or similar). That will give you what you want in terms of no standing charge, although it will cost you more overall, but as you have said you are happy to pay a higher unit cost/cost per kWh then it would seem to be the best option for you.

Contribute towards the network?.

What do you think customers are DOING NOW, Matt?.

There was a time not so long ago when there were no standing charges----who contributed to the "network" then?.

The FACT is that the SC are FAR TOO HIGH---and...""Ofgem ruled that energy tariffs no longer need include a standing charge following recommendations by the Competition and Markets Authority back in 2016.""

You think that it's fair on the elderly and low users?.

The high users would hardly notice the SC---low users WOULD.

Yes, I pay a SC for electric----but as I am a regular user, I do not see the financial hardship as much as I do for the gas.

As a very low user of gas, I built up a "debt" of over £400 ---JUST FOR STANDING CHARGES, over a number of years.

No matter how you try to justify the SC, it cannot be justified--especially at the high rate it is.

The energy companies should be doing all they can to help customers at this time---instead, not only are energy costs rocketing, but SC are also!

Do not tell me that they could not remove them or at the very LEAST, reduce them dramatically.

DE_612183

Costs in your energy bill | Ofgem

This from Ofgem - whilst it doesn't answer the question fully, it's shows it not just a simple question or for that matter a simple charge.

At the end of the day the suppliers have costs and they want to make a profit.

The easiest way to reduce prices is for there ti be no profit - return to nationalised industry 

EssexHebridean

Ofgem giving suppliers permission to not include a standing charge doesn't mean that none of them should be charging one, though. As already pointed out, some suppliers choose to put their network costs, levies etc within the unit price - Utilitia are the example given I believe although it may not be possible to switch to them right now, at least not without making a phone call. 

Nobody is kow-towing to anyone, or justifying anything - a lot of people have been trying to explain the facts about the SC though - what it is, how it works, and what it is made up of - all of which are NOT anything the energy companies have any control over. as already said - the choice suppliers have is being upfront with it, saying "this is what we have to pay to cover these things, and this is how that works out to you" and charging a SC, or saying "we don't charge a SC" but then applying far higher unit rates. One of those models will always suit some people more than the other, and one way or the other there will always be folk who consider that for whatever reason, it shouldn't be done that way.