Campaign to ban Standing Charges

wittynamegoeshere

pochase said:

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.

How much is a can of beans?  Say it's 50p in Tesco or 60p in Waitrose.  Everyone can understand this, if you want to save money you know where to go.

What if it was 40p in Tesco plus a 30p till rental fee.  Now it's more complicated - it's more than Waitrose if I buy one but less if I buy two.  Now I need a computer to find the lowest price tin of beans, depending upon my annual consumption.

I'm suggesting that, as per the thread title, no supplier should be able to charge any standing charge at all.  They all just charge per unit so, as with a tin of beans in the real world, it's easy and transparent to see which offers the best deal.

ariarnia

wittynamegoeshere said:

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.

okay. then we scrap standing charge and everyone with an electric or gas connection instead has to pay a tax equivalent to the standing charge directly to the government (like road tax that you pay no matter how many miles you drive). not seeing how thats better?

its already been said the suppliers dont get to keep the money other than the 1.9% they are allowed for profit. it goes to the maintenance of the network and green policies and the SOLR process and has to be paid for. 

scrapping the standing charge benifits low users (we would definitely benifit) but being a low user isnt the same as being poor so its not progressive. relatively wealthily people use less energy because hey can afford to be energy efficient. 

wittynamegoeshere

MattMattMattUK 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 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. 

Utterly irrelevant.  Every business has fixed and variable costs, whether they do or don't deliver to your house makes no difference.

[Deleted User]

wittynamegoeshere said:

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?

Both ownership and rental involve the transfer of responsibility and usually the exclusivity of possession.  Neither of these things are true in the case of the power grid.

Closest analogy elsewhere is probably the transportation (particularly road) network, where there is a cost for the fuel and a cost for the infrastructure, each paid to a different industry participant.  It just happens that in that case, the infrastructure cost is paid from general taxation (apart from toll roads) and you don't see it in the same way, whereas in the case of energy your supplier collects everyone's part on their behalf before passing it on.

You could always agitate to change the system and have your energy bill from your supplier, and then your infrastructure bill from your DNO if that would make it easier for you to understand (although there are also the green levies, SOLR costs, smart metering costs etc. to include - perhaps 4 or 5 separate bills are in order?).

sammyjammy

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.  Plus it would make billing vastly more transparent if the unit rate is the one variable, then you could actually compare on price without a computer and some meaningful competition might emerge one day.

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.

So if we were to go with your suggestion chances are suppliers would make more money than they currently get from standing charges to manage the network etc.  You want them to make more money?

ariarnia

wittynamegoeshere said:

ariarnia said:

wittynamegoeshere said:

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.

okay. then we scrap standing charge and everyone with an electric or gas connection instead has to pay a tax equivalent to the standing charge directly to the government (like road tax that you pay no matter how many miles you drive). not seeing how thats better?

You're the first to suggest this, perhaps an attempt at a straw man argument, or perhaps you just haven't read the thread.

how is being the first to suggest something a straw man argument? and how calling my argument a straw man argument anything other than a personal attack? 

you were comparing it to petrol so i compared it to road tax. perfectly logical. 

ariarnia

[Deleted User] said:

wittynamegoeshere said:

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?

Closest analogy elsewhere is probably the transportation (particularly road) network, where there is a cost for the fuel and a cost for the infrastructure, each paid to a different industry participant.  It just happens that in that case, the infrastructure cost is paid from general taxation (apart from toll roads) and you don't see it in the same way, whereas in the case of energy your supplier collects everyone's part on their behalf before passing it on.

careful apparently comparing it to road tax is a straw man!

dunstonh

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.  Plus it would make billing vastly more transparent if the unit rate is the one variable, then you could actually compare on price without a computer and some meaningful competition might emerge one day.

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 operate a higher profit margin than the suppliers.

It is also wrong to assume that heavy users are big houses.   Larger houses and those with more wealth are more likely to fit solar and be low users.   

wittynamegoeshere

Deleted_User said:

wittynamegoeshere said:

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?

Closest analogy elsewhere is probably the transportation (particularly road) network, where there is a cost for the fuel and a cost for the infrastructure, each paid to a different industry participant.  It just happens that in that case, the infrastructure cost is paid from general taxation (apart from toll roads) and you don't see it in the same way, whereas in the case of energy your supplier collects everyone's part on their behalf before passing it on.

Let's run with your roads analogy.  If you own a car you're an operator on the roads network - you are paying road tax (fixed) and fuel (variable).  Agreed.

But a business running on that road network charges its customers a simple fee.  A taxi charges a fare, which is one simple price.  They don't charge an annual membership fee.  I, as their customer, don't need to know or care how much they pay for road tax, tyres or the local car wash.

All businesses have fixed overheads, there's absolutely nothing unusual about the energy industry in this respect.  What is unusual is that they can pass this directly to their customers, regardless of how much of their product they buy.

StocktonFlyer

My previous supplier did not have a standing charge... but they did have an annual membership fee.

They went bust, by the way.