Energy Standing Charges

gbhxu

Mstty said:

gbhxu said:

Sounds like we need a social tarrif standing charge.

BT can manage to do this, so I don't see why distribution companies can't.

To put it into some context. I pay BT the same amount for line rental for 3 months (and it includes a small amount of calls) that I pay for the electric standing charge in a month.

What was Western Power Distribution (East Midlands), made over £240 million in the year ending March 2022

It is also unfair that I can't get any payment out of National Grid for having an ugly electric pole on my property. Despite it supplying 4 of my neighbors as well as me.

I suspect the social tariff is high on Martin Lewis agenda. He has already mooted this a few times.

I don't think this is needed as the prices come down bit suspect that as this notional affordable £2500 price cap has been deemed the benchmark the Government will intervene at this level.

Some estimates show a notional average house at £2000 from July onwards.

What level do you feel a notional social tariff should be set at?

For a start, renewable energy generators should not be able to link their selling price to gas prices.

All prices should be the same however you pay.

Standardize standing charges.  I don't see why there is regional variation.

Probably easiest thing to do would be to scrap the standing charge and add a little to Kwh price. i.e. the more you use the more you pay.

Price cap to be means tested.

Just a few of my ideas

matt_drummer

For a start, renewable energy generators should not be able to link their selling price to gas prices.

All prices should be the same however you pay.

Standardize standing charges.  I don't see why there is regional variation.

Probably easiest thing to do would be to scrap the standing charge and add a little to Kwh price. i.e. the more you use the more you pay.

Price cap to be means tested.

Just a few of my ideas

I use no electricity so I will pay nothing towards the network costs that I use.

However, if the price cap is means tested I wouldn't be on it as I am 100% certain that I earn too much money.

Your idea just doesn't work.

Adding the standing charge to unit price just benefits the well off.

There is a regional variation because the costs of the network vary by region, the standing charges pay for the costs of supplying us with energy where we live.

Why shouldn't you pay less if your payment method is cheaper for the energy supplier to administer?

MattMattMattUK

gbhxu said:

Mstty said:

gbhxu said:

Sounds like we need a social tarrif standing charge.

BT can manage to do this, so I don't see why distribution companies can't.

To put it into some context. I pay BT the same amount for line rental for 3 months (and it includes a small amount of calls) that I pay for the electric standing charge in a month.

What was Western Power Distribution (East Midlands), made over £240 million in the year ending March 2022

It is also unfair that I can't get any payment out of National Grid for having an ugly electric pole on my property. Despite it supplying 4 of my neighbors as well as me.

I suspect the social tariff is high on Martin Lewis agenda. He has already mooted this a few times.

I don't think this is needed as the prices come down bit suspect that as this notional affordable £2500 price cap has been deemed the benchmark the Government will intervene at this level.

Some estimates show a notional average house at £2000 from July onwards.

What level do you feel a notional social tariff should be set at?

For a start, renewable energy generators should not be able to link their selling price to gas prices.

Why should someone selling electricity from renewable generation not get paid the same as someone generating from gas or nuclear, they are selling the same product, so why should they be penalised for investing in a carbon neutral method of production?

gbhxu said:

All prices should be the same however you pay.

Why should payment methods which have additional costs be subsidised by those payment methods which have reduced costs? Why should someone paying on receipt of bill, which costs more to administer and has a higher default rate not have those costs reflected in the price that they pay?

gbhxu said:

Standardize standing charges.  I don't see why there is regional variation.

There is regional variation to reflect the variations in cost in different regions of the country. 

gbhxu said:

Probably easiest thing to do would be to scrap the standing charge and add a little to Kwh price. i.e. the more you use the more you pay.

Awful idea, as has been explained multiple times before. Also, as things currently happen, the more you use, the more you pay, that is the nature of being billed per kWh.

gbhxu said:

Price cap to be means tested.

Even worse idea, firstly it creates a cliff edge, secondly it is hugely divisive, thirdly it penalises those who are actually paying for it. Social tariffs, means tested tariffs etc. are the absolute worst way to manage the prices. 

TheElectricCow

gbhxu said:

Probably easiest thing to do would be to scrap the standing charge and add a little to Kwh price. i.e. the more you use the more you pay.

Issue with that is no matter how you do it it’s going to have a strong positive impact on one group of people while having an equally strong negative impact on another.

For the sake of discussion let’s say the standing charge is 40p.

If you remove this and increase the unit rate by an equivalent amount based on a household consuming 15kwh per day that’s an extra 2.67p per unit while still contributing the full 40p of costs. If a different household only uses 3kwh per day they’re effectively only paying 8p towards the 40p worth of costs to supply them, and that money will have to be made up elsewhere.

Flip that around and base the unit rate increase on the 3kwh household and it’s an extra 13.33p per unit, now they’re paying the needed 40p in costs but the 15kwh household is effectively paying £2 per day towards standing charges and is much worse off.

How would you decide what level the increased unit rate will be set? Somebody is going to lose out either way you tip the balance.

matt_drummer

How would you decide what level the increased unit rate will be set? Somebody is going to lose out either way you tip the balance.

I would imagine that they would set the unit cost at a level that benefits users at their consumption level, and not worry about the impact on anybody that uses more or less than they do.

maxandmurph

MattMattMattUK said:

maxandmurph said:

I have a question regarding the daily standing charges on both gas and electric. The maximum unit charge (KWh) is governed by the Energy Price Guarantee (EPG)  and I have those charges which were displayed on the governments web site, which are specific to my area (Northumberland). However I have discovered that the cap on daily standing charges are governed by OFGEM thus stipulated by the Energy Price Cap (EPC). OFGEM does not give these on their web site and do not answer emails by individuals on specific questions, as I have found out to my dismay. My question is, does anyone know or can direct me to where I can find what is the daily standing charge on gas and electric in my area from 1st April 2023? MSE indicates that for gas it is 29.11p/day and for electric it is 52.97p/day but these are the average figures taken for the whole country and

If you have a look on your suppliers website they will show the rate you will be charged, or at least they may do in the next few days as some are updating their websites and tariffs at the moment. 

maxandmurph said:

as several energy companies are offering variable contracts after the 1st April 2023 at a much much higher daily charge, I am unsure whether they are breaking the cap on the charges or if my area has a higher daily charge rate.

They are not breaking the cap, the cap only applies to the Standard Variable Tariff, the default tariff that all suppliers must offer, if you agree a fix/tracker etc. with your supplier then they can make the standing charge whatever they want and you have the choice whether to choose those tariffs or not. 

I think you have completely misunderstood or not read fully what my question is. OFGEM sets the Energy Price Cap which governs solely what the standard daily charge is for both gas and electric which varies slightly from whatever area in the country you live. The Energy Price Guarantee is set by the government and covers the unit charge for both utilities which is lower than the price cap. What I am asking is, what is the standard daily charge for both gas and electric respectively for my area and where do I find this. I am looking to find the best deal out there and I require this information to assess which company is offering this. If the cap is set at, for arguments sake 59p/day for electric and a utility company indicates that their daily charge is 60p/day, then they are breaking the price cap, which is illegal. I want to be able to ascertain this, but if I do not know what the cap is on the daily charges then I cannot do that. 
With respect to fixed term rate contracts, you will find it difficult to source any as utility companies are at present not offering such.       

PeterGr

As posted several times since the budget on 15 March the regional rates under the EPG from 1 April to 30 June are shown in page 20 of this document.  https://researchbriefings.files.parliament.uk/documents/CBP-9714/CBP-9714.pdf

The data for these rates is based on OFGEM's price cap data published on 27 February, which includes the standing charges for each region, but require some calculations to arrive at p/day including VAT.  https://www.ofgem.gov.uk/publications/default-tariff-cap-level-1-april-2023-30-june-2023

Energy Suppliers mustn't exceed these rates, but may vary in the rates that they publish.  Economy 7 rates in particular are dependant on the peak and off peak rates published for their particular tariff commencing on 1 April

MattMattMattUK

maxandmurph said:

MattMattMattUK said:

maxandmurph said:

I have a question regarding the daily standing charges on both gas and electric. The maximum unit charge (KWh) is governed by the Energy Price Guarantee (EPG)  and I have those charges which were displayed on the governments web site, which are specific to my area (Northumberland). However I have discovered that the cap on daily standing charges are governed by OFGEM thus stipulated by the Energy Price Cap (EPC). OFGEM does not give these on their web site and do not answer emails by individuals on specific questions, as I have found out to my dismay. My question is, does anyone know or can direct me to where I can find what is the daily standing charge on gas and electric in my area from 1st April 2023? MSE indicates that for gas it is 29.11p/day and for electric it is 52.97p/day but these are the average figures taken for the whole country and

If you have a look on your suppliers website they will show the rate you will be charged, or at least they may do in the next few days as some are updating their websites and tariffs at the moment. 

maxandmurph said:

as several energy companies are offering variable contracts after the 1st April 2023 at a much much higher daily charge, I am unsure whether they are breaking the cap on the charges or if my area has a higher daily charge rate.

They are not breaking the cap, the cap only applies to the Standard Variable Tariff, the default tariff that all suppliers must offer, if you agree a fix/tracker etc. with your supplier then they can make the standing charge whatever they want and you have the choice whether to choose those tariffs or not. 

I think you have completely misunderstood or not read fully what my question is. OFGEM sets the Energy Price Cap which governs solely what the standard daily charge is for both gas and electric which varies slightly from whatever area in the country you live. 

It only covers the standing charge and unit cost on the SVT.

maxandmurph said:

The Energy Price Guarantee is set by the government and covers the unit charge for both utilities which is lower than the price cap.      

I am aware of what the EPG is, it provides for a discount to be applied to qualifying tariffs. 

maxandmurph said:
What I am asking is, what is the standard daily charge for both gas and electric respectively for my area and where do I find this. 

You need to look at each individual supplier for what they charge, although based on the EPG implementation for those on single rate tariffs they all fall within £0.002 of each other within a particular region, for E7 they can vary by up to £0.10 though.

maxandmurph said:
I am looking to find the best deal out there and I require this information to assess which company is offering this.

On SVT with EPG applied they are all within £0.0002 of eachother, the cheapest is generally Octopus, based on the nominally average usage figures the annual saving would be less than £5 per year.

maxandmurph said:
If the cap is set at, for arguments sake 59p/day for electric and a utility company indicates that their daily charge is 60p/day, then they are breaking the price cap, which is illegal. I want to be able to ascertain this, but if I do not know what the cap is on the daily charges then I cannot do that. 

None of them are "breaking the price cap" or offering illegal tariffs, all their tariffs have to be approved by Ofgem before they are allowed to offer them, who certify them as compliant. However the cap only applies to SVT, although as far as I am aware no residential suppliers are offering anything other than SVT for standard tariff types (eg. they are offering trackers, EV tariffs etc.). There is no cap on standing charges as such, but there is a complex interaction between the Price Cap and the SVT which gives suppliers a very narrow window of both within which to set their prices. 

Gerry1

MattMattMattUK said:

as far as I am aware no residential suppliers are offering anything other than SVT for standard tariff types

Ovo seem to be offering a fixed tariff again.

https://forums.moneysavingexpert.com/discussion/6434932/ovo-now-offering-a-fixed-tariff-for-one-year

pensionpawn

MattMattMattUK said:

pensionpawn said:

matt_drummer said:

MikeyPGT said:

Standing charges do unfairly impact low users - my gas standing charge is over 90% of my actual spend and for electricity around a third.  To my mind a fairer option would be to add a small percentage to the unit price so that higher users contribute more.  Also the madness of the National Grid (and the energy companies in general) being in private hands needs to be addressed

I pay an electricity standing charge.

I buy virtually no electricity as I have loads of solar panels and batteries.

I am not rich but had the the resources and the home to be able to do this.

If the standing charge was zero and added to unit rates I would contribute nothing to maintaining the network and you would be paying part of my share of the fixed costs.

Does that sound fair to you?

There are lots of people like me.

Moving standing charges onto unit rates will punish those that can least afford it, people in poorly insulated homes, people at home all day like pensioners, sick people who use more.

Your idea is fatally flawed!

I disagree. I also have panels. We both supply energy to the grid and the DNO factor that into their energy balancing calculations. Do I charge the grid a "standing charge" for the "maintenance" of my network? Before you mention the FiT and export tariff they are payments for generation,.....

You do not maintain a network and they are still provide a a network connection to you so that the energy you are paid to generate can be distributed.

pensionpawn said:

If my inverter or micro optimisers fail, it's just me picking up the tab to replace them to continue generating energy for myself and the grid.

You are paid for the energy you export and those costs would fall under generation costs not network costs, just as a gas fired power station or commercial solar farm is paid for it's energy exported, but not a "network" cost.

pensionpawn said:

Please, give me a reason why all energy companies should not be mandated to offer at least one zero standing charge tariff. In my view this offers the consumer increased choice and additional competition in the market place.

Zero standing charge tariffs would involve one group of customers subsidising another group.

pensionpawn said:

I would also like to see net metering tariffs enter the market. Why should the unit value of exported micro generator energy be less than the cost of energy imported from the grid. 1 kWhr powers devices in exactly the same way regardless of where it comes from.

Of course you would because you would personally benefit. The reason exported kWh are not paid at imported kWh rated is because imported kWh include other costs, where as exported kWh is paid at roughly the equivalent rate that generators are paid for exporting to the grid. The fact that you do not understand how the grid operates and the associated costs does not mean you should personally get more money.

I hadn't thought of that....

Import / export, surely that's a matter of perspective? It was when I used to plan traffic flows across national telecoms networks. The cost of installing an MSC, HLR, digging up the ground, installing microwave dishes etc was roughly similar for all operators and agreed in interconnect contracts.

You've ignored / failed to spot my points about a significant factor for the large rises in the standing charge is due to recovering the costs of failed energy companies (Ofgem failure) and levies for poor "Smart" meters and green energy subsidies.

My suggestion of energy companies offering at least one zero standing charge tariff is not at the exclusion of all other tariffs. It gives the consumer greater choice, which I believe most of us would agree is beneficial to all. No one would be forced onto a zero standing charge tariff. Consumers would chose what works best for them. If the tariff is much higher (and approved by Ofgen) so be it. If only the first few units are at a higher rate (again, subject to Ofgen approval), so be it.

In relation to the issue of near instantaneous fluctuation of energy prices, yes I take the point raised by someone else that this is a significant factor and that unit prices are a convenience for the industry as a whole, however it doesn't always stand that a micro generator would always lose out. I'm currently exporting ~1 kW and according to National Grid Live the price of energy is 16p / kWhr. I'm generating 1.4 kWs, so the export tariff, at a deemed value of 50% of generation, would pay me 0.5 * 1.4 * 6.8p = 4.76p. 30% of the true current value of electricity, 1 * 16p = 16p 
Now I appreciate that one calculation in a moment in time does not make a justification for a whole year, however there is a case to investigate. Throw in a large battery and the option to store free solar to export when prices are optimal takes the debate further.