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Energy prices held but standing charge up

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Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
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  • MattMattMattUK
    MattMattMattUK Posts: 8,802 Forumite
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    edited 26 March 2023 at 1:07PM
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    Daily standing charges are up slightly for some, but unit rates are down.
    All tariffs are compliant with the EPG.
    Energy suppliers profits are capped at 2%.
    Every suppliers do not get to set the maximum level of the standing charge, it is set by Ofgem.
    All suppliers are charging pretty much the same standing charge in each region, either a few fractions of a penny.
  • The_Green_Hornet
    The_Green_Hornet Posts: 1,444 Forumite
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    edited 26 March 2023 at 12:45PM
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    An Ofgem explainer of what the different costs are can be found here -> 

    https://www.ofgem.gov.uk/information-consumers/energy-advice-households/costs-your-energy-bill
  • sevenhills
    sevenhills Posts: 5,928 Forumite
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
  • matt_drummer
    matt_drummer Posts: 1,360 Forumite
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
    The energy supplier still had to pay the standing charge to the network operator.

    The customer still paid the standing charge, it was just presented differently as a higher charge per unit of energy.

    Depending on the customers use, the energy supplier would either subsidise the standing charge or profit from the higher unit charges. In some cases they would break even.

    The standing charge is passed on by the energy supplier, the amount they pay is based on the number of homes they supply.

    There is no getting away from the fact that there are fixed costs of energy supply and all customers have to pay it. If one customer does not pay their share of the fixed costs then somebody else will have to pay it, either other customers or the energy retailer..

    So tariffs without standing charges are a commercial decision as you say, and the energy supplier takes a gamble on whether those tariffs will be profitable.

    What i do is find the cheapest tariff available based on my use, I don't care how it is presented in terms of standing charge and unit costs, money is money and my advice is to spend as little of it as you need to on energy.


  • MattMattMattUK
    MattMattMattUK Posts: 8,802 Forumite
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
    They were commercial decisions, under the EPG and the price cap they are not, at least not in the same way as they cannot increase unit rates to compensate for a lower standing charge. For a tariff with zero standing charge they must hand over the fixed amount based on the standing charge to the network operators, Ofgem etc. regardless of whether they charge it or not. 

    On current EPG and based on historic price cap rates on units and if the energy suppliers were making their maximum permitted 2% profit then they would only break even if the customer used an average of more than 66 kWh of electricity and 140 kWh of gas per day, anything less would be loss making.
  • ariarnia
    ariarnia Posts: 4,225 Forumite
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    edited 26 March 2023 at 4:01PM
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    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
    you can still sign up today to a 0 standing charge tarrif. theres 2 i no of. 

    here's an example quote from utilita (your price would depend on your region) 



    you pay the first rate for the first 2 kwh of energy each day then the 'saver' rate for the rest. you would have to work out for yourself if its more expensive or cheaper for you but normally the ballpark is the house has to be empty/using less than 1kwh for 75% of the year to be cheaper than the variable under the price guarentee. 

    at the rates above a 'average' user (2900 kwh of electric and 12000 of gas on a 'normal' seasonal curve) would pay about £2650 so about £150 more than a tarrif with the standing charge. 

    https://join.utilita.co.uk/
    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.
  • markin
    markin Posts: 3,854 Forumite
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    1000's of DNO and NG employees will be wanting/getting a 10% pay rise so some costs will never come back down, Then the is the price of wire, transformers, fuel, and any new vans they need.

    Maybe in the grand picture its only a small % ?
  • sevenhills
    sevenhills Posts: 5,928 Forumite
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    ariarnia said:
    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
    you can still sign up today to a 0 standing charge tarrif. theres 2 i no of. 

    here's an example quote from utilita (your price would depend on your region) 



    you pay the first rate for the first 2 kwh of energy each day then the 'saver' rate for the rest. you would have to work out for yourself if its more expensive or cheaper for you but normally the ballpark is the house has to be empty/using less than 1kwh for 75% of the year to be cheaper than the variable under the price guarentee. 

    at the rates above a 'average' user (2900 kwh of electric and 12000 of gas on a 'normal' seasonal curve) would pay about £2650 so about £150 more than a tarrif with the standing charge. 

    https://join.utilita.co.uk/
    So it's wrong to state that the consumer has to pay a standing charge, but there are charges that the supplier needs to recoup.
  • ariarnia
    ariarnia Posts: 4,225 Forumite
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    edited 26 March 2023 at 5:16PM
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    ariarnia said:
    Just had an email from EDF where I'm on the variable rate for now.    Daily standing charges are up which makes a mockery of the energy price guarantees, although the total estimate for energy is roughly the same for now.  Looks like they are preparing for lower wholesale prices but boosting  their standing charges to compensate to future proof their revenue when the time comes.  Any comments anyone?  I shall .definitely be looking at the competition when the time comes with an eye on standing charges.
    The energy suppliers make no profit on the standing charge, they have to hand it over to Ofgem, network operators and the government.
    A few years ago you could get a tariff without a standing charge. Did the network operators receive no money?
    How suppliers set standing charges alongside the unit rate are commercial decisions.
    you can still sign up today to a 0 standing charge tarrif. theres 2 i no of. 

    here's an example quote from utilita (your price would depend on your region) 



    you pay the first rate for the first 2 kwh of energy each day then the 'saver' rate for the rest. you would have to work out for yourself if its more expensive or cheaper for you but normally the ballpark is the house has to be empty/using less than 1kwh for 75% of the year to be cheaper than the variable under the price guarentee. 

    at the rates above a 'average' user (2900 kwh of electric and 12000 of gas on a 'normal' seasonal curve) would pay about £2650 so about £150 more than a tarrif with the standing charge. 

    https://join.utilita.co.uk/
    So it's wrong to state that the consumer has to pay a standing charge, but there are charges that the supplier needs to recoup.
    a standing charge has to be paid per customer. 

    i think its playing with words to say the customer pays via a standing charge on the bill or if the cost is included in the unit rates. 

    both ways the customer pays the standing charge. 
    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.
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