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Standing Charge 10% Increase

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  • pochase
    pochase Posts: 3,449 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Shell, south west, electricity standing charge up 11.7%!
    I have had to have (annual E7 radio teleswitch decommissioning misinformation) a smart meter, that does not work correctly. We pay for these.
    We are all paying for failed energy companies.
    We are all paying for green energy / net zero policies.

    Those defending this standing charge rise, please offer an explanation as to why zero standing charge tariffs are not being offered, which would give consumers a better choice? Cartels prefer not to encourage competition?

    If the supplier does not get the money for the standing charge from you, they have to pay it out of their own pocket. A daily standing charge of 60p is £219 per year, They make a profit of 2%, so for them to not make a loss the customer needs to have a electrcity bill of over £10950. 

    If you guarantee to use more than £11000 electricty per year they might drop the standing charge for you, and that means they will not make any profit at all.


  • sevenhills
    sevenhills Posts: 5,938 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Scot_39 said:
    coupleuk said:
    Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).

    These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.

    How does that help people reduce their electric bill? - where is the incentive?

    Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.

    Amazed this website does not fight the issue.

    Ofgem set the standing charge - not the energy firms - not the government.

    That is not what I have read!
    The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
    If Ofgem set the level of the standing charge, we would all have messages about it's increase.
    No doubt you will, it's still a couple of weeks until April and the price changes.

    Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost.  (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.)  Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf

    Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October).  Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.
    This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.

    The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.

  • Scot_39
    Scot_39 Posts: 3,470 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper
    edited 23 March 2023 at 1:50AM

    Don't want to belittle the many, but there are people who genuinely don't grasp things like utility bills or household budgeting.  Better to teach many that at school, than say trig or calculus - that very few - even in the top flight - will use in real life.

    And the current mix of EPG / EBSS - has only made that even worse - with some suppliers doing far clearer versions than others.

    AS to multiple pricing models

    The sad thing is that with the advent of price comparison websites - who do the arithmetic based on usage - arguably the market - for those able (unlike many of 0.5m on legacy tariffs) - and those willing - could probably cope with some additional variation.

    And apart from Octopus - who discount the SC a little - and is it Uilita - who do a tariff with the SC rolled into 1st two units per day iirc - people appear stuck with that exercise.

    The advent of social tariffs is probably a more likely focus - in the imminent future.

    Even the Cons probably will back it - as don't want to be handing out £300 to UC claimants every 6 months for ever - especially if it can shift it from tax subsidy to other consumer subsidy.
  • Spoonie_Turtle
    Spoonie_Turtle Posts: 10,307 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 23 March 2023 at 2:47AM
    Scot_39 said:
    coupleuk said:
    Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).

    These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.

    How does that help people reduce their electric bill? - where is the incentive?

    Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.

    Amazed this website does not fight the issue.

    Ofgem set the standing charge - not the energy firms - not the government.

    That is not what I have read!
    The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
    If Ofgem set the level of the standing charge, we would all have messages about it's increase.
    No doubt you will, it's still a couple of weeks until April and the price changes.

    Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost.  (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.)  Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf

    Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October).  Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.
    This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.

    The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.

    I wonder when that article was first written?  Realistically right now on the standard variable tariff, suppliers have a choice of charging the full standing charge so as not to make a loss, or to charge lower and make a loss.  There's no profit in it.  They do not keep any of the capped standing charge on the SVT, which does indeed vary by region.

    They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
  • bristolleedsfan
    bristolleedsfan Posts: 12,644 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 23 March 2023 at 3:15AM
    Scot_39 said:
    coupleuk said:
    Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).

    These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.

    How does that help people reduce their electric bill? - where is the incentive?

    Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.

    Amazed this website does not fight the issue.

    Ofgem set the standing charge - not the energy firms - not the government.

    That is not what I have read!
    The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
    If Ofgem set the level of the standing charge, we would all have messages about it's increase.
    No doubt you will, it's still a couple of weeks until April and the price changes.

    Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost.  (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.)  Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf

    Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October).  Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.
    This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.

    The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.



    They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
    They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,
  • Spoonie_Turtle
    Spoonie_Turtle Posts: 10,307 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    Scot_39 said:
    coupleuk said:
    Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).

    These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.

    How does that help people reduce their electric bill? - where is the incentive?

    Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.

    Amazed this website does not fight the issue.

    Ofgem set the standing charge - not the energy firms - not the government.

    That is not what I have read!
    The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
    If Ofgem set the level of the standing charge, we would all have messages about it's increase.
    No doubt you will, it's still a couple of weeks until April and the price changes.

    Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost.  (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.)  Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf

    Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October).  Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.
    This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.

    The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.



    They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
    They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,
    How would that work with the set network costs - recouped by a higher unit rate perhaps?
  • RavingMad
    RavingMad Posts: 783 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Back when there were tariffs to choose from, you could choose a tariff with a lower daily SC but a slightly higher unit rate.

    Looking back at a spreadsheet I was using in 2017, i can see my workings out for four different suppliers. SC ranged from 10p to 20p (for both gas and electric) and unit rates varied from 2.33p to 2.78p for gas and 9.38p to 11.57p for electric.

    Choosing the right tariff saved me a couple of hundred quid a year.

    Back when the market was flooded with suppliers and each had a load of tariffs to choose from, I'm guessing quite a lot didn't bother moving and stuck with standard tariffs where they being ripped off but it didn't matter because we were only paying £60 a month 
  • bristolleedsfan
    bristolleedsfan Posts: 12,644 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Scot_39 said:
    coupleuk said:
    Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).

    These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.

    How does that help people reduce their electric bill? - where is the incentive?

    Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.

    Amazed this website does not fight the issue.

    Ofgem set the standing charge - not the energy firms - not the government.

    That is not what I have read!
    The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
    If Ofgem set the level of the standing charge, we would all have messages about it's increase.
    No doubt you will, it's still a couple of weeks until April and the price changes.

    Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost.  (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.)  Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf

    Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October).  Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.
    This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.

    The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.



    They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
    They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,
    How would that work with the set network costs - recouped by a higher unit rate perhaps?
    Yes .......
  • matt_drummer
    matt_drummer Posts: 2,007 Forumite
    1,000 Posts Second Anniversary Name Dropper
    edited 23 March 2023 at 8:57AM

    How would that work with the set network costs - recouped by a higher unit rate perhaps?
    Yes .......
    I think most people would just end up paying more, the increase in the unit rate would have to be high enough to ensure that the fixed costs were covered at the lowest predicted annual usage of the country. Inevitably we would use more than this as a country and on the whole our costs would be higher.

    People like me would win and those that could least afford it would suffer.
  • Mstty
    Mstty Posts: 4,209 Forumite
    1,000 Posts First Anniversary Photogenic Name Dropper
    edited 23 March 2023 at 11:00AM
    There is no simple answer to this, and there will be more discomfort with the upcoming interest rate rise and the inflation that is hitting everyday goods. Council tax rises.

    Then the EPG and national debt needs to be attempted to be chipped away at.....at some point.

    No political bias here just worth remembering the struggles people are going through are not just energy prices and their frustrations are about a number of issues.

    Personally I don't have an answer that fits all, because it does not exist. However, I am sympathetic to dual fuel users having to pay on average £300 a year in standing charges. That used to be the total yearly bill for low/savvy energy users not too long ago.

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