STANDING CHARGES STEALTH TAX

DE_612183

EssexHebridean said:

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. 

Which is why competition was brought in - so customers had a choice...

[Deleted User]

Nationalisation of energy suppliers - uhm. As President Macron is now finding out, Nationalisation comes at a significant cost c. 8 to 10Bn Euros for EDF according to many reports. If this was to happen in the UK, these costs would be added to consumer bills.

PS.  There is no guarantee that Nationalised suppliers will be as efficient as private suppliers.

DE_612183

[Deleted User] said:

Nationalisation of energy suppliers - uhm. As President Macron is now finding out, Nationalisation comes at a significant cost c. 8 to 10Bn Euros for EDF according to many reports. If this was to happen in the UK, these costs would be added to consumer bills.

PS.  There is no guarantee that Nationalised suppliers will be as efficient as private suppliers.

The UK government energy bills support scheme is costing c £37Bn - and we a tad bit smaller than France....

What_time_is_it

"PS.  There is no guarantee that Nationalised suppliers will be as efficient as private suppliers."

Actually I would argue that there is very good chance that a nationalised supplier could be just as INefficient as private suppliers, but it would come with the added benefit or increased clarity, fairness and simplicity. Energy IS GOING TO BE EXPENSIVE whichever way it is distributed. But is doesn't have to be complicated, and stacked again the most vulnerable.

BUFF

epsom said:

I suggest you all look at the recent profits that most energy companies are making right now---and it's a LOT.

Not on domestic energy in the UK it isn't.

markin

DE_612183 said:

Dolor said:

Nationalisation of energy suppliers - uhm. As President Macron is now finding out, Nationalisation comes at a significant cost c. 8 to 10Bn Euros for EDF according to many reports. If this was to happen in the UK, these costs would be added to consumer bills.

PS.  There is no guarantee that Nationalised suppliers will be as efficient as private suppliers.

The UK government energy bills support scheme is costing c £37Bn - and we a tad bit smaller than France....

That 10b number is out of date, last i read its already 40+ billion, and probably more this coming winter.

[Deleted User]

If What_time_is_it said:

"PS.  There is no guarantee that Nationalised suppliers will be as efficient as private suppliers."

Actually I would argue that there is very good chance that a nationalised supplier could be just as INefficient as private suppliers, but it would come with the added benefit or increased clarity, fairness and simplicity. Energy IS GOING TO BE EXPENSIVE whichever way it is distributed. But is doesn't have to be complicated, and stacked again the most vulnerable.

Arguably, with the Ofgem Cap, the Government has set a maximum energy charge which most energy suppliers are required to comply with. I fail to see how there would be more clarity, fairness and simplicity with a single Nationalised supplier. If the Government was minded to do away with standing charges it could do so through regulation. Similarly, the pass through cost to consumers of SoLR costs; consumer credit protection; the smart meter programme; Warm Homes Discount et al is a Government choice supported by the Labour Government in its day.

Don’t forget the Law of Unintended Consequences. Doing away with standing charges would also favour domestic energy generators such as those with PV solar. Ebico suffered when these consumers switched to them during the summer months to save a few £s on standing charges. It didn’t make for a good business model.

epsom

EssexHebridean said:

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. 

I have just talked to Utilita, and they are not taking any more applications right now--but they hope to sometime this year.

They have no standing charges, and their gas rate for pre payment smart meter is 25.869 p/kWh.
As a very low gas user, I would be very happy paying that---with no standing charge.

EssexHebridean

epsom said:

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.

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

Why did you not choose a zero standing charge tariff when they were easily available? That's what we did - as I mentioned through Ebico for one, and there were a couple of other companies we were with at various times to. Just paid a monthly DD of £1.50 or so for the gas used. Once those companies ceased to trade, or ceased to trade with that model, we increased the Direct Debit - initially to £7 a month, and now to £10. We still run in credit though - because we've kept an eye on what our DD needs to be to cover the costs we have to pay... You can't reasonably blame the SC for incurring the debt over "a number of years" when for several of those years you could have, had you chosen to, avoided paying the SC at all? It's only been since the middle of last year we've been back on a tariff with a SC attached. 

If you are struggling to clear your debt and meet the current costs of your gas bill, then drop a post with our SOA over on the Debt Free Wannabe board and we'll be happy to take a look and see if we can help. It's best not to ignore it though or you may find yourself on a pre-payment meter which will cost you more in the first place. 

*edit* That's good gen on Utilita's current costings by the way - although they would be way more expensive for us for electricity I may well consider them for gas later in the year then. Thanks! 

Ultrasonic

What_time_is_it said:

"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.

There is nothing inherently hard for anyone to understand about the standing charge. It's a concept just like phone companies charging a fixed monthly 'line rental' fee with calls charges on top depending on usage, and I've never heard anyone try to argue that is somehow too difficult a concept for most people to understand.

Overwhelmingly I think the issue with most people properly understanding their energy bills comes more from a general lack of awareness of how much energy they actually use.

As to the core question of this thread: I'm a low energy user but think the standing charge concept is a totally logical and fair one that does not need changing.