Will standing charges increase in April 23? 12 February at 1:36PM in Energy 42 replies 1.3K views

MikeJXE

pensionpawn said:

Dolor said:

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.

However in times of old zero standing charge tariffs were available and there is no reason why they shouldn't be available now, co-existing alongside the traditional tariffs, increasing customer choice. No one would be forced onto a tariff that isn't right for them, however some may consider a zero standing charge tariff better for them.

To directly answer the OPs question I only see the SC rising as the continued push for net zero continues and more energy companies go belly up. Who's paying for all the additional infrastructure (not home chargers etc) to migrate all UK vehicles to EVs?

We the customer thats who. Who's going to make a profit from it all ? The companies that's who. 

MikeJXE

ariarnia said:

EssexHebridean said:

Dolor said:

EssexHebridean said:

Dolor said:

MikeJXE said:

macman said:

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.

It seems to me only I answered the question from the OP

will standing charges increase from their current levels ?

I do know what the standing charge is I have been told many many times  but thats irrelevant to the question. 

Everyone else seems to have got sidetracked by my answer explaining what the standing charge is instead of sticking to the post. 

Perhaps it should be renamed Government levy or tax or whatever is appropriate so that users are not confused and will know exactly what they are paying for.

Does this government want to be more transparent ? I think not 

It is not a Government tax per se. The standing charge covers the cost of getting energy to your home AND the cost of Government energy support schemes PLUS the cost of failed suppliers.

The Government could have chosen to bin the Consumer Levy which would have left millions of consumers out of pocket as their credit balances would have realised pennies for every pound.

The ongoing argument about adding a hydrogen levy to the standing charge is that it would be a hidden Net Zero tax.

There are already aspects of the current SC that are related to Net Zero, no? Is the Hydrogen thing going to be buried in with those, or a specific item on its own? (Apologies if this has been mentioned and I missed it!) 

Make of this what you will.

Why do we need a levy and what will be the impact on consumer bills?

The purpose of the levy is to provide long-term funding for the hydrogen business model, which will enable hydrogen producers to overcome the operating cost gap between low carbon hydrogen and fossil fuels.

The levy is not expected to be implemented until 2025 (subject to legislation being in place) and so we do not expect it to have impacts on consumer bills before then. Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security. As policy development on the levy is ongoing, with a number of key decisions still pending, there is uncertainty regarding the precise impact of the levy on consumer bills.

Source: Gov.uk

So what do we think. Finish clearing the SOLR debt, the Bulb situation then leaves the SC with an uplift, and when that finishes the Hydrogen levy means we STILL have the uplifted charge?

Come to think of it - heaven help us when we have to start explaining that one to people as well, as seemingly there aren’t enough words of one syllable to make clear that the SC is NOT a revenue earlier for suppliers! 

once something has gone up then its easier to keep it at that level (to pay for 'other' things) than to reduce it and pay for taxes. 

people (wrongly) blame energy companies for the standing charge but blame the goverment for tax rates. 

if you were the chanceller which would you prefer

Thats undoubtably because it's on their energy bill 

ariarnia

MikeJXE said:

ariarnia said:

EssexHebridean said:

Dolor said:

EssexHebridean said:

Dolor said:

MikeJXE said:

macman said:

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.

It seems to me only I answered the question from the OP

will standing charges increase from their current levels ?

I do know what the standing charge is I have been told many many times  but thats irrelevant to the question. 

Everyone else seems to have got sidetracked by my answer explaining what the standing charge is instead of sticking to the post. 

Perhaps it should be renamed Government levy or tax or whatever is appropriate so that users are not confused and will know exactly what they are paying for.

Does this government want to be more transparent ? I think not 

It is not a Government tax per se. The standing charge covers the cost of getting energy to your home AND the cost of Government energy support schemes PLUS the cost of failed suppliers.

The Government could have chosen to bin the Consumer Levy which would have left millions of consumers out of pocket as their credit balances would have realised pennies for every pound.

The ongoing argument about adding a hydrogen levy to the standing charge is that it would be a hidden Net Zero tax.

There are already aspects of the current SC that are related to Net Zero, no? Is the Hydrogen thing going to be buried in with those, or a specific item on its own? (Apologies if this has been mentioned and I missed it!) 

Make of this what you will.

Why do we need a levy and what will be the impact on consumer bills?

The purpose of the levy is to provide long-term funding for the hydrogen business model, which will enable hydrogen producers to overcome the operating cost gap between low carbon hydrogen and fossil fuels.

The levy is not expected to be implemented until 2025 (subject to legislation being in place) and so we do not expect it to have impacts on consumer bills before then. Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security. As policy development on the levy is ongoing, with a number of key decisions still pending, there is uncertainty regarding the precise impact of the levy on consumer bills.

Source: Gov.uk

So what do we think. Finish clearing the SOLR debt, the Bulb situation then leaves the SC with an uplift, and when that finishes the Hydrogen levy means we STILL have the uplifted charge?

Come to think of it - heaven help us when we have to start explaining that one to people as well, as seemingly there aren’t enough words of one syllable to make clear that the SC is NOT a revenue earlier for suppliers! 

once something has gone up then its easier to keep it at that level (to pay for 'other' things) than to reduce it and pay for taxes. 

people (wrongly) blame energy companies for the standing charge but blame the goverment for tax rates. 

if you were the chanceller which would you prefer

Thats undoubtably because it's on their energy bill 

so is vat... 

MikeJXE

VAT is accepted and universal, everyone knows it's a tax and it's not hidden 

When most people see Standing charge they think it a standing charge because that's how it's described 

EssexHebridean

It’s incredibly well documented what the standing charge is, and how it works. It’s bewildering that several times a week we still get people who simply don’t seem to be unable to grasp the concept in spite of it being clearly explained yet again, links provided to the source of information etc. 

it’s not difficult, is it? A charge raised to cover the infrastructure for getting our energy to our homes, along with covering costs for certain other elements. It is different in different regions because the cost is different in different regions. It’s set centrally, not by individual suppliers. What is difficult to grasp about that? 

ariarnia

MikeJXE said:

VAT is accepted and universal, everyone knows it's a tax and it's not hidden 

When most people see Standing charge they think it a standing charge because that's how it's described 

it IS a standing charge. aka a flat charge not related to the amount on the bill like phone line rental or the standing charge on your water bill.

the problem doesn't seem to me to be the name. it mostly seem to be that people dont understand the supplier collects it to pass on to where it needs to go (which isnt all to the goverment. because it's not a tax) 

because like i said up thread the most common misunderstanding about energy seems to be not realising that suppliers are not the hole 'energy industry' and are actually completely separate from both energy generation and the infrastructure

and that's not a 'this goverment transparancy' problem that's a 'not understating theres a supply chain' problem (like knowing meat doesn't come from the supermarket) 

Dolor

EssexHebridean said:

I’d love to see the return of zero standing charge tariffs available for gas for sure. Not convinced that ship hasn’t sailed, though. 

As more people buy into PV solar, zero standing charge tariffs have proved not to be a very good business model.

EssexHebridean

Dolor said:

EssexHebridean said:

I’d love to see the return of zero standing charge tariffs available for gas for sure. Not convinced that ship hasn’t sailed, though. 

As more people buy into PV solar, zero standing charge tariffs have proved not to be a very good business model.

Yes, I genuinely can’t see them returning unfortunately. A shame for me, allowing for my current gas use (unit price only) being sub £45 per year…! I’ve always said though, looked at morally,  in real terms it actually isn’t right for me to NOT have to pay for the infrastructure side of things too! 

markin

ariarnia said:

EssexHebridean said:

Dolor said:

EssexHebridean said:

Dolor said:

MikeJXE said:

macman said:

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.

It seems to me only I answered the question from the OP

will standing charges increase from their current levels ?

I do know what the standing charge is I have been told many many times  but thats irrelevant to the question. 

Everyone else seems to have got sidetracked by my answer explaining what the standing charge is instead of sticking to the post. 

Perhaps it should be renamed Government levy or tax or whatever is appropriate so that users are not confused and will know exactly what they are paying for.

Does this government want to be more transparent ? I think not 

It is not a Government tax per se. The standing charge covers the cost of getting energy to your home AND the cost of Government energy support schemes PLUS the cost of failed suppliers.

The Government could have chosen to bin the Consumer Levy which would have left millions of consumers out of pocket as their credit balances would have realised pennies for every pound.

The ongoing argument about adding a hydrogen levy to the standing charge is that it would be a hidden Net Zero tax.

There are already aspects of the current SC that are related to Net Zero, no? Is the Hydrogen thing going to be buried in with those, or a specific item on its own? (Apologies if this has been mentioned and I missed it!) 

Make of this what you will.

Why do we need a levy and what will be the impact on consumer bills?

The purpose of the levy is to provide long-term funding for the hydrogen business model, which will enable hydrogen producers to overcome the operating cost gap between low carbon hydrogen and fossil fuels.

The levy is not expected to be implemented until 2025 (subject to legislation being in place) and so we do not expect it to have impacts on consumer bills before then. Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security. As policy development on the levy is ongoing, with a number of key decisions still pending, there is uncertainty regarding the precise impact of the levy on consumer bills.

Source: Gov.uk

So what do we think. Finish clearing the SOLR debt, the Bulb situation then leaves the SC with an uplift, and when that finishes the Hydrogen levy means we STILL have the uplifted charge?

Come to think of it - heaven help us when we have to start explaining that one to people as well, as seemingly there aren’t enough words of one syllable to make clear that the SC is NOT a revenue earlier for suppliers! 

once something has gone up then its easier to keep it at that level (to pay for 'other' things) than to reduce it and pay for taxes. 

people (wrongly) blame energy companies for the standing charge but blame the goverment for tax rates. 

if you were the chanceller which would you prefer

People need to know who to blame.


"National Grid generated approximately 18.4 billion British pounds in its 2022 fiscal year, an increase of roughly 25 percent in comparison to a year earlier"

That would install a lot of Grid storage, Or a new nuclear plant every other year.

ariarnia

and hopefully a good chuck of cash will be going into things like nuclear in the next little while. 

but ‘people’ also need to realise that these things take a long time to get up and running so being to quick to blame might mean people who no there not going to be around by the time someone is taking the credit will spend some of the cash on short try ‘fixes’ that sound good but don’t actually help much. 

in my experience blaming might make you feel better but it very rarely actually makes things better