The standing charge

StevieD54

Apologies if this has been done to death, but I just cannot find a straight answer to a very simple question…….why has the standing charge for electric more or less trebled?  There’s no way infrastructure costs can have near trebled, so why are the power companies not being asked to justify these crazy rises?

MattMattMattUK

There is a sticky at the top of the forum that links to an MSE article

https://www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/?_ga=2.255419146.320126834.1659453566-1395277182.1659453566&_gl=1*xkq34j*_ga*MTM5NTI3NzE4Mi4xNjU5NDUzNTY2*_ga_X74CWQS9F0*MTY1OTQ1MzU2Ni4xLjEuMTY1OTQ1MzU4Mi40NA..#accordion-content-0336620245-3

The short of it is most of it is SoLR, the rest is increased operating costs.

pochase

How about the thread on top of this page?

https://forums.moneysavingexpert.com/discussion/6339555/mse-update-why-has-the-standing-charge-for-electricity-nearly-doubled#latest

And it has doubled for some but not trebled, except if you were are coming of a fixed rate with low standing charges.

Chrysalis

A big chunk of it is to over the costs of the bankrupt companies, including the credit balances been preserved.

Some of it is somehow ofgem has been fooled into thinking there has been significant infrastructure cost increases.

savers_united

Whilst some of the known reasons have been covered above, I also suspect that SC have been hiked so that unit rates can be kept lower and costs spread across all households / energy users.

It is often those least able to afford their energy or take steps to reduce it that get hit hardest, alot of social housing and rentals are quite poor in terms of efficency, its normally the better off who can afford new white goods that are cheaper to run, or invest in solar / batteries etc.

It would quite soon become a 2 tier system that disproportionately hits those who are already struggling with energy costs, and whilst there will be those who do get caught in the SC trap being a low user the SC does at least set some form of fixed price for everyone regardless of their usage.Reducing energy use will always result in lower bills then someone using more energy
Think someone who could afford a newer efficient property, EV car and some solar panels compared with someone down the road in a rental struggling to heat the property and using old appliances, their income a fraction but energy bill twice as much. 

MWT

savers_united said:

Whilst some of the known reasons have been covered above, I also suspect that SC have been hiked so that unit rates can be kept lower and costs spread across all households / energy users.

All of the elements that make up the SC cap calculation are disclosed in the Ofgem documents so there isn't a lot of room for that sort of manipulation.

Ofgem can and do review the components and there may be a case for moving some of them from the standing charge to unit costs.

Evan3020

My last bill, £40 total, £22 standing charge.

QrizB

Evan3020 said:

My last bill, £40 total, £22 standing charge.

You are not a typical user.

Evan3020

It means i struggle to reduce my bills because its now mostly standing charges.

wild666

A third of my monthly bill is the SC. Maybe they could scrap the daily SC and put the price onto a kWh of electric using average usage, the price of 1 kWh would increase by 12.5% for electric and around 8.5% for gas but it would benefit low users but hit high users in the pocket whilst average users wouldn't see any difference in the prices they pay.

wild666

Evan3020 said:

My last bill, £40 total, £22 standing charge.

My SC for a 31 day month is £23.52 and my electric usage is £34 and gas around £2.60 for the month in summer. A summer bill is around £60 of which over 33% is the SC just over 39.1% of the total summer bill but around 30% of a winter bill if there is no increase in the SC's in October.