Will standing charges increase in April 23?

Options
wakeupalarm
wakeupalarm Posts: 1,103 Forumite
First Post Name Dropper First Anniversary
With the announcement that the EPG will increase in April from £2500 to £3000, will standing charges increase from their current levels?
The standing charges include an element of the SOLR costs, so have these been repaid yet?  Are there additional costs to be added?
«1345

Comments

  • MikeJXE
    MikeJXE Posts: 3,117 Forumite
    First Anniversary First Post Name Dropper
    Options
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
  • GingerTim
    GingerTim Posts: 2,051 Forumite
    First Post First Anniversary Name Dropper Combo Breaker
    edited 12 February 2023 at 1:50PM
    Options
    MikeJXE said:
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
    The energy companies don't get to keep the standing charge.

    To the OP - I don't think the costs of the Bulb bailout have been added to the standing charge as yet. It remains to be seen whether that will amount to an increase, or paying at the current rate for longer. Or, indeed, if we end up paying through general taxation.
  • [Deleted User]
    Options
    GingerTim said:
    MikeJXE said:
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
    The energy companies don't get to keep the standing charge.

    To the OP - I don't think the costs of the Bulb bailout have been added to the standing charge as yet. It remains to be seen whether that will amount to an increase, or paying at the current rate for longer. Or, indeed, if we end up paying through general taxation.
    Given that the cost of Bulb’s problems is likely to be much smaller than first envisaged, I can well see these costs be added to standing charges.

    The Energy Secretary also wants to add a Hydrogen levy to all bills from 2025 onwards. Net Zero comes at a significant cost and it is politically easier to add the cost to bills than it is to add it to taxes. 
  • ariarnia
    ariarnia Posts: 4,225 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    edited 12 February 2023 at 2:16PM
    Options
    and in august last year ofgem confirmed they were not going to move the solr costs from the standing charge to the unit rates (because it would disproportionally impact people who are in all electric homes and who need to use more energy because of disability etc) 

    so if they DO add the bulb charges then it will be to the standing charge. 

    until we get the actual announcement (due on feb 27th) then the best we might have to go on is the cornwall insight prediction (updated 6 feb) which show a slight increase to the gas standing charge and a sharp drop to the electric. 

    i think (dont know) thats based on assuming the solr charges are being removed and bulb not being added. 

    https://www.cornwall-insight.com/press/cornwall-insight-release-latest-price-cap-predictions/


    Almost everything will work again if you unplug it for a few minutes, including you. Anne Lamott

    It's amazing how those with a can-do attitude and willingness to 'pitch in and work' get all the luck, isn't it?

    Please consider buying some pet food and giving it to your local food bank collection or animal charity. Animals aren't to blame for the cost of living crisis.
  • MikeJXE
    MikeJXE Posts: 3,117 Forumite
    First Anniversary First Post Name Dropper
    Options
    Mstty said:
    MikeJXE said:
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
    It's.not set by the energy companies.


    As far as I can remember I have always paid a standing charge, I keep being told it's for the infrastructure 

    So are you saying thats not true the government takes it all. ? 


  • [Deleted User]
    Options
    MikeJXE said:
    Mstty said:
    MikeJXE said:
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
    It's.not set by the energy companies.


    As far as I can remember I have always paid a standing charge, I keep being told it's for the infrastructure 

    So are you saying thats not true the government takes it all. ? 


    What is a standing charge?

    The standing charge is a fixed amount that you pay on your energy bill every day, regardless of your usage. 

    The charge covers those ‘non-energy’ costs that suppliers have to pay on behalf of customers. These include but are not limited to: the costs of using and maintenance of the energy networks (the infrastructure that gets electricity and gas to your home), costs of government support schemes and the costs of carrying out meter readings.

    Standing charges are applied to both electricity and gas tariffs. They can also vary slightly by the region of the country you live in.

    The energy regulator Ofgem’s rationale for why these costs should be included in the standing charges is to distribute the amounts evenly across everyone. If they were added to the kWh usage costs, it could lead to vulnerable households with high energy costs paying proportionally larger sums.

    Source: Good Energy (and many others)

    The problem that the Government is having with getting a Hydrogen Levy through Parliament is that it does not benefit any consumer directly. It is a levy to raise money for Hydrogen research and projects.

  • macman
    macman Posts: 53,098 Forumite
    Name Dropper First Post First Anniversary
    Options
    MikeJXE said:
    Mstty said:
    MikeJXE said:
    IMO yes as it's the only way energy companies can get more out of you when you are using less. 
    It's.not set by the energy companies.


    As far as I can remember I have always paid a standing charge, I keep being told it's for the infrastructure 

    So are you saying thats not true the government takes it all. ? 


    The energy companies (by which in this instance I assume you mean the retail suppliers) neither own nor maintain the supply network. That is done by National Grid, and the regional DNO's. SSE and SP also have some share in the ownership of the electricity grid.
    You need to distinguish between the wholesale suppliers, distributors, and retail suppliers, as they are totally separate companies doing totally separate functions.
    Just referring to 'energy companies' as one amorphous profiteering mass is extremely misleading.
    He didn't say 'the gov't takes it all'. He said that the s/c level is determined by the regulator.
    No free lunch, and no free laptop ;)
  • ariarnia
    ariarnia Posts: 4,225 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    Options
    yes. it seems a common misunderstanding to think that the energy company you pay your bill to is the hole thing. setting the price and keeping the profits. 

    but its ofgem that say what can be charged and the government that take the bulk of the cash as tax or policy costs. 

    and then theres the energy producers (the people who actually drill or mine or generate often on a global level) that are the ones making the headlines with record profits. and even if a company owns both a generation and a supply arm then there not legally allowed to do special deals with themselves in the way a lot of people seem to think they do.   

    so the prices are set by ofgem based on

    actual costs the three months before (which is why a lot of suppliers were making a loss until the government subsidy because the costs were much higher than the rates used by ofgem to set the price),

    the various taxes and costs that the supplier has to pass on,

    and then an allowance that works out to about a 2% profit the supplier gets to keep for themselves 
    Almost everything will work again if you unplug it for a few minutes, including you. Anne Lamott

    It's amazing how those with a can-do attitude and willingness to 'pitch in and work' get all the luck, isn't it?

    Please consider buying some pet food and giving it to your local food bank collection or animal charity. Animals aren't to blame for the cost of living crisis.
  • diystarter7
    diystarter7 Posts: 5,202 Forumite
    First Anniversary First Post Name Dropper
    Options
    Hi OP

    I often search for MSE articles as they are often easier to read and very accurates

    Quote from link below may give us an idea

    How standing charges work

    Standing charges are a fixed daily rate that you pay for having an electricity and/or gas connection to cover the cost of supplying energy. Under the energy price cap, Ofgem is using standing charges to recover the costs of the huge number of energy firms that went bust last year – a total of £1 billion this year.

    About £68 of the typical £1,971 a year bill under the current price cap is for supplier failures, while other costs, such as increases in fixed network costs (the cost of maintaining energy networks) and policy costs (such as green levies and the rise in the warm home discount rebate) also contributed to higher standing charges.

    Currently, electricity standing charges are 45.34p per day for electricity and 27.22p per day for gas.

    What does Ofgem say?

    An Ofgem spokesperson said: "We looked long and hard at whether moving the costs from standing charges to usage was the right thing to do, but the numbers just didn't stack up."Our analysis shows it would disproportionately negatively affect some of the most vulnerable consumers who use high amounts of energy and are least able to reduce their use, such as those with disabilities and the elderly, while resulting in minimal savings for those it would benefit – around just £1 a month."While this was specifically in relation to recovering supplier of last resort costs, we will continue to keep standing charges under review and consult widely on any possible future changes."
    https://www.moneysavingexpert.com/news/2022/08/ofgem-rules-out-shifting-the-costs-of-supplier-failure-out-of-th/


    Thanks

Meet your Ambassadors

Categories

  • All Categories
  • 343.7K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.8K Work, Benefits & Business
  • 608.9K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards