Campaign to ban Standing Charges

Astria

wittynamegoeshere said:

I do understand the reasoning for standing charges.  However, it would be beneficial if they were removed and the equivalent amount loaded onto unit rates.  Then lower users (usually poor) would pay less, and heavy users (big houses or don't care about the environment) would pay more.

Seems fair to me.

Yes, so people with 3 of four houses around the UK would only pay for the what they used, and not have to worry about the standing charges on each property.

wittynamegoeshere said:

Tesco charges per item.  They don't charge a fixed fee to cover the cost of the building and staff costs when you walk in the door, they cover this overhead from the item cost.  This is how almost every business outside of the energy cartel works.

Apart from when I use my mobile phone I'm charged regardless of whether I use it not and not per call, I pay for my broadband regardless of whether I use it or not and not per Gb downloaded, I pay for my water regardless of whether I use it or not, I pay for various insurances regardless of whether I use them or not...

wittynamegoeshere

pochase said:

You mean the poor users with their second  or third homes?

It's easy to find a downside with anything if that's what you're aiming to do.  Of course there would be undeserving people who benefit from it, as there currently are and would also be from any change to anything in the world.

I'm suggesting that there would be more advantages to scrapping standing charges than disadvantages.

Petrol is charged per litre.  I don't need to pay any of the fixed costs of the retailer I'm buying it from.

It's a sign of an uncompetitive market.  Plus, as I've already said, it makes comparing prices very difficult - and I suspect that the suppliers rather like it this way.

[Deleted User]

ariarnia said:

it would be good if it would be possible to not pay the standing charge for vacant properties if someone is in hospital or if probate is taking a long time and the services arent being used at all. like the council tax grace period. discomnection and reconnection is expensive and not really an option. but that will only be a very small number of people each year. i would also hope that we have more tariffs in the future that are 0 standing charge. then people can decide for themselves if they are better off with higher unit rates and no charge (very low users) or paying the charge. but thats also not going to happen until theres some competition again so 2 years plus. 

Some suppliers actually do this - if you have many months with zero usage, they have been known to waive the standing charge (and even backdate that decision) - but it's hit-and-miss who does and when.

I think we would have zero standing charge tariffs now still, if the cap wasn't structured how it is.  At the moment, you can't increase unit rates over the cap to cover a zero standing charge to give that option because it would break the licence conditions, and no supplier is going to have two tariffs with the same rate but only one of them with standing charges.  Although I suppose the cap-exempt green suppliers probably could do the variance required.

wild666

Banning SC's and putting the daily amount on the kWh used would benefit low users and hinder high users. Average daily usage on a 2900 kWh per year is roughly 7.95 kWh per day so anyone using less than 8 kWh per day would benefit from it whilst those who use more would not see any benefit. It would only be those who use 8 kWh per day that saw no change. 

As people are now looking at ways to cut down both electric and gas usage the more people that use less than 8 kWh of electric and 32.88 kWh of gas per day the less money given to keep the network of electric and gas, which, I think, some of the SC's aren't used to keep the network going as they put 18.6p per day on the SC of electric for failed suppliers, when they will remove that is anyone's guess. 

wittynamegoeshere

Deleted_User said:

wittynamegoeshere said:

Tesco charges per item.  They don't charge a fixed fee to cover the cost of the building and staff costs when you walk in the door, they cover this cost from the item cost.  This is how almost every business outside of the energy cartel works.

Tesco either own or rent the building, and the cost for this doesn't change depending on footfall.  That is the big difference.

I don't understand your argument.  The energy supplier owns or rents the power lines.  The supermarket needs to be bigger and more expensive if there are more customers.

There are only a very tiny number of companies that charge any kind of fixed fee, and they're usually pretty unusual.  One example I can think of is Costco - you need to pay an annual membership to shop there.  But probably 99% of companies charge a price for the goods or services only and work out the rest behind the scenes - that is what running a business is about.

wittynamegoeshere

All that would be needed would be to divide the entire national standing charge by the total units used by everyone every year, and add this to the price of each unit.

This would be no more complicated than at present, where it is divided by the number of households.

Either way, it's one division and no more, just simple maths, and needs to be reviewed periodically - either as consumption varies over the years or as additional houses are built.  It's all the same.

pochase

Why does it make comparing prices hard if all suppliers y currently have the same prices/same standing charges?

The opposite is true, if there would be tariffs with high unit rates but no standing charge and tariffs with standing charges and lower unit rates it is much harder to compare this for many users. They would need to know their usage and how to calculate the cost, and we see daily how many have no idea how to do this,

Everybody is part of the cost the standing charges are used for, but some people think others should pay for their part of the cost.

[Deleted User]

wittynamegoeshere said:

[Deleted User] said:

wittynamegoeshere said:

Tesco charges per item.  They don't charge a fixed fee to cover the cost of the building and staff costs when you walk in the door, they cover this cost from the item cost.  This is how almost every business outside of the energy cartel works.

Tesco either own or rent the building, and the cost for this doesn't change depending on footfall.  That is the big difference.

I don't understand your argument.  The energy supplier owns or rents the power lines.  The supermarket needs to be bigger and more expensive if there are more customers.

There are only a very tiny number of companies that charge any kind of fixed fee, and they're usually pretty unusual.  One example I can think of is Costco - you need to pay an annual membership to shop there.  But probably 99% of companies charge a price for the goods only and work out the rest behind the scenes - that is what running a business is about.

They don't.

wittynamegoeshere

Well that was a very informative answer.

They use the power lines, which require upkeep, perhaps you have some secret industry terminology.

What's the actual point you're trying to make?

MattMattMattUK

wittynamegoeshere said:

Tesco charges per item.  They don't charge a fixed fee to cover the cost of the building and staff costs when you walk in the door, they cover this overhead from the item cost.  This is how almost every business outside of the energy cartel works.

Tesco do not supply directly to your home as part of the base cost, you either pay additionally for delivery, or you go and get it yourself.