Energy prices held but standing charge up

matt_drummer

ariarnia said:

sevenhills said:

MattMattMattUK said:

charliewhatsit 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 as long as you have used 2Kwh of electricity you have paid the standing charge.

The supplier is paying the standing charge.

The unit rate is 33.58p per Kwh.

The standing charge is 2 x (66.970 - 33.580) which is 66.780p per day.

The only way not to pay the full standing charge of 66.78p per day is to use less than 2 Kwh per day.

I do that with loads of solar panels and batteries but who is this really any good for, especially the people who have an issue with the standing charge?

This is just a normal tariff disguised as paying no daily standing charge, it technically doesn't, but in money terms (which is all that matters) it does.

The same applies to the gas tariff, obviously.

matt_drummer

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.

The supplier is paying the standing charge, they have no choice. They are recouping it from the customer by inflating the price of the first two units consumed each day.

The only way to avoid some of it is to use less than two units a day, if you want to avoid it completely then you need to use nothing. 

If you can use nothing every day then you can have your electricity and gas supplies disconnected then you will pay no standing charges.

The fact that the standing charge isn't separately detailed does not mean that you are not paying it, clearly you are.

Spoonie_Turtle

matt_drummer said:

ariarnia said:

sevenhills said:

MattMattMattUK said:

charliewhatsit 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/

The only way not to pay the full standing charge of 66.78p per day is to use less than 2 Kwh per day.

I do that with loads of solar panels and batteries but who is this really any good for, especially the people who have an issue with the standing charge?

Second/holiday homes maybe?  Which in general would most likely belong to people who aren't in dire straits due to the standing charge.

RavingMad

Perhaps I'm wrong but anyone with Octopus, can they go to their account and within their breakdown pie chart there is a margin built in to their SC.

Scot_39

sevenhills said:

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.

It's really symantics in the end.

Hence Utilita and its far more expensive first rates.  at 2kwh,

pay c38p extra, not 29p SC for gas.
66.8p extra, not c53p ave with regional vars to c62p iirc dd sr.

And those day rates don't look particularly discounted.  Region ?

And the reason for it being more than, I would suggest, is they know many of their customers can avoid any or any significant use for parts of the year on one fuel at least.

So yes it's not called a standing charge, but the supplier is covering the fixed costs from your payment. 

More than cover if you use 2kWh per fuel daily.

And the Ofgem TDCVs - 2900 sr electric/12000 gas.  2kW tiny in winter, borderline for many even in summer.

Even if away / empty, my fridge freezer and fire/ home alarms etc use over 1kWh. 
But then no gas if I had it - apart from maybe pilot lights and any frost cycle on boiler.

matt_drummer

Second/holiday homes maybe?  Which in general would most likely belong to people who aren't in dire straits due to the standing charge.

Yes, good example thank you.

sevenhills

Scot_39 said:

sevenhills said:

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.

It's really symantics in the end.

It is different at the moment because the government are controlling energy prices. 
But once that has ended, there may be more tariffs suitable for low users.
Is that a good thing, because all the different pricing tariffs confuses the consumer.

MattMattMattUK

sevenhills said:

Scot_39 said:

sevenhills said:

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.

It's really symantics in the end.

It is different at the moment because the government are controlling energy prices. 
But once that has ended, there may be more tariffs suitable for low users.
Is that a good thing, because all the different pricing tariffs confuses the consumer.

It confuses some consumers. There are plenty on here who have said that they would choose to pay a higher unit rate and a higher bill overall to have zero standing charges, people like those will always make sub-optimal choices, they are choosing to make an irrational choice. They did not appear to be able to explain why, at least not in a way that did not get from A to Z going via 6, potato, conspiracy theories and some other random thing added into the mix.

Should someone have the power to veto their poor financial decisions? Should companies not be allowed to offer them a more expensive tariff if that is what they say that they want? Should people who believe in conspiracy theories be declared mentally unfit rather than just looked upon as weird crazies? I accept a line probably has to be drawn at some point, but I am not sure that poor financial decision making and irrationality are it on their own, though I also agree it would be hard to define where that line should actually be drawn. 

Spoonie_Turtle

sevenhills said:

Scot_39 said:

sevenhills said:

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.

It's really symantics in the end.

It is different at the moment because the government are controlling energy prices. 
But once that has ended, there may be more tariffs suitable for low users.
Is that a good thing, because all the different pricing tariffs confuses the consumer.

That's what comparison sites were there for.

silverwhistle

matt_drummer said:

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.


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..

Yes, I was on a zero standing charge tariff and it worked for me as I was a very low user. Then the supplier put in a minimum usage charge which was against the spirit and probably letter of the law in how it worked and was advertised, so I moved.

Of course there are fixed costs, but as ever in this country the poorer are penalised for being poor. The costs to supply a heavy user are more than they are for a low user in terms of generation capacity and network reinforcement and I'm not sure the balance has been struck correctly with the recent standing charge increases. It's no use telling people to tighten their fuel spend if one element cannot be altered.

I should add that with solar panels and an EV I have no problems paying my bills and my direct debit is very low (£20) with only a small debt on my account at the end of winter, courtesy of the government assistance.