Standing Charge Increase

Graywisdom

With the imminent announcement of the new Energy Cap due, I, being niave, cannot understand how and why OfGem allows  producers/suppliers to raise all their "sundries" including the dreaded Standing Charge by as much, and some times more than, the actual percentage increase in the fuel supplied. This summer, the SC on the gas side of my energy bill is almost as much as the cost of the gas I am using to heat my water. I presume all the suppliers would argue that their charges are "competitive"!

GingerTim

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

Suppliers don't profit from the standing charge.

jimjames

OFGEM sets the standing charge

pochase

Suppliers only collect SC Ofgem has set and pays it over to different recipients.

Section62

pochase said:

Suppliers only collect SC Ofgem has set and pays it over to different recipients.

I thought Ofgem set the SC cap, and the sums each supplier had to pay in levies (e.g. for SoLR), but left the supplier to set their standing charges as a commercial decision (subject to capping)?

Has that changed recently?

EssexHebridean

All SVR tariffs will be at the same levels of SC (give or take) as set by Ofgem - fixes may be at different rates but it’s a customer decision on whether to fix or not.

pochase

Section62 said:

pochase said:

Suppliers only collect SC Ofgem has set and pays it over to different recipients.

I thought Ofgem set the SC cap, and the sums each supplier had to pay in levies (e.g. for SoLR), but left the supplier to set their standing charges as a commercial decision (subject to capping)?

Has that changed recently?

It should be the way that Ofgem sets the required standing charge for payments to the different recipients.

As you say they set a cap, what a supplier is allowed to bill on SVT in standing charges.

The supplier can collect a higher or lower standing charge  on fixed tariff, but only a cheaper standing charge on SVT due to the cap.

If they bill a lower standing charge they have to pay for the difference from their profit if it a SVT, for fixed tariffs they could increase the unit rates instead.

So I would say they can make the commercial decison to set their own standing charge lower, but they still have to pay the amount set by Ofgem.

Graywisdom

I may not be the brightest spark in the matchbox but what is, in plain english,  SVT and how does it relate to Standing Charge? 

QrizB

Graywisdom said:

I may not be the brightest spark in the matchbox but what is, in plain english,  SVT and how does it relate to Standing Charge? 

SVT is the Standard Variable Tariff, the tariff you get if you don't agree to any of the other ones your supplier might offer. This is the tariff that Ofgem's cap applies to.

[Deleted User]

Graywisdom said:

I may not be the brightest spark in the matchbox but what is, in plain english,  SVT and how does it relate to Standing Charge? 

A tariff is made up of a unit price and a daily standing charge.

The SVT (Standard Variable Tariff) is the default tariff that you are on if you didn't specifically agree anything else.  At the moment, every company (I think) has this set to the cap that OFGEM set.  So that's the OFGEM cap unit price and the OFGEM cap standing charge.