Standing Charges

[Deleted User]

Tesla6518 said:

What I cannot understand with the SC and the price cap is that you are charged a different rate depending on your method of bill payment, I thought the cap was supposed to limit the price at the maximum the energy companies could charge for unit and standing charge price,. It seems this is not the case and should be explained properly by Ofgem. The energy companies will find any way they can to increase their disproportional profits.

It does cap that and profits are not disproportional.

The entire explanation is available.

Ectophile

Tesla6518 said:

What I cannot understand with the SC and the price cap is that you are charged a different rate depending on your method of bill payment, I thought the cap was supposed to limit the price at the maximum the energy companies could charge for unit and standing charge price,. It seems this is not the case and should be explained properly by Ofgem. The energy companies will find any way they can to increase their disproportional profits.

Different ways of payment cost the energy companies different amounts to administer.  The cheapest for them is direct debit; they can grab the money straight out of your bank account.  Sending out bills and then waiting until the customer chooses to send a cheque isn't good at all for them, as it's more work and makes late payment more likely.  Prepayment meters are a hassle to administer, especially if there's a key to be topped up at a local shop.  The shopkeeepers don't offer the service for free - someone has to pay for it.

The people who are actually selling you the energy aren't making lots of money.  Remember that many of them went bust not so long ago as they were forced to sell energy at a loss.  The profits are going to the people who own gas wells.  And anyone who built a wind farm is also in a happy position at the moment; every time the gas price goes up, they make more money.