Percentage of bill going on standing charges.

BikingBud

Dolor said:

BikingBud said:

Dolor said:

wrf12345 said:

Ofgen are to blame for the absurdly high standing charges that discourage low/green usage, no reason why they can't be eliminated and rolled into the unit charge (only those above average use would pay more). The latest bit of trickery is to increase the standing charges on prepayment meters from July 1st and slightly decrease the unit rate (the idiots in govn seem to only have mandated that the overall average rate be the same as DD) in direct opposition to the mandate to improve things for those on prepayment meters. Those on smart prepayment meters do not cost more than DD because they can not get into debt so that element saves the co's a huge amount of dosh and s/c's should be moving towards zero. I am not sure if we are dealing with incompetence or crookedness from Ofgen but they should be closed down.

Ofgen does not exist. It is the Office of Gas and  Electricity Markets (Ofgem): a non-Ministerial department within the UK Government. If Ofgem was shut down, it would have to be replaced with another organisation that had identical responsibilities.

You keep pedalling the assertion that standing charges are unfair yet you fail to acknowledge that there is an infrastructure cost associated with maintaining the Grid; providing you with a meter etc. These fixed costs do not vary based on how much energy you use.

Zero standing charge tariffs failed because low users and those, say, with PV solar do not contribute to business profits in any meaningful way. The supplier still has to raise bills and pay staff to purchase energy; deal with customer issues etc

The underlying premise in all your posts is that those who earn more or use more energy should pay more. I would respectfully suggest that those who are higher earners already contribute more to the Tax pot which pays for the public services that we all benefit from. 

Sadly, we have become a country that is now associated with falling productivity. If I was younger, standing charges would be low in my list of concerns. I would be more worried about who was going to pay for my State Pension; Health and other benefits? Taxing the rich is not a sustainable plan.

And perhaps that is the most significant tissue, we are paying to feed profits rather than delivering a key service that people need to live. This applies across all utilities. 

It should not be driven by profits but by ensuring funding is reinvested into the necessary infrastructure, looking forward 20-50 years, to ensure energy security and assure a level of service.

Selling off the industry and focussing on profits have got us into this situation. 

PFI schemes offered politicians a way of improving schools; hospitals etc without having to demand higher personal taxes: higher taxes are not usually regarded as a vote winner. Politicians are also reluctant to commit to infrastructure schemes which might benefit the opposition at the time of delivery. 

I confess that I have never understood the public anger against profits. Profits generate both taxes and further investment which, in turn, generates jobs and growth. Even when dividends that are paid go shareholders this money is usually spent in products or services that also generate taxes and growth. This is no guarantee that if a Government ran the railways that the ‘profits’ (if there were any) would be re-invested in the railways. This is not how Government finances work.

Off topic but did they really deliver those improvements? Has the infra been funded to sustain requirements over the next 20-50 years?

I've said this before: The taxpayer always pays and the consumer always pays so why not stop all the pretence about competition and nationalise the utilities industry?

ETA This not about profits per se but why are consumers being hammered for basic utilities, if I want to pay sky or bt or virgin or whoever or none of them as I can live without media then great. But you cannot apply that level of choice to utilities (Public utilities are meant to supply goods/services that are considered essential; water, gas, electricity,)

Interesting comment upon the railways, that seems to be working well doesn't it! HS2, a glorified white elephant whilst the regions in real need of infra update, northern cities with poor and very outdated links, who were promised jam tomorrow have now been advised they're not getting any jam at all.

Krakkkers

Tax payer always pays?
Where do tax payers get their money from?
Not everyone can or should work for the state.
Profit is good and should be celebrated.

wild666

So far this month I've used less than £1.60 in gas but the SC is£5.77. In summer the SC far outweighs my gas usage but in winter the SC is about 30% of the gas used.

MattMattMattUK

Krakkkers said:

Tax payer always pays?
Where do tax payers get their money from?
Not everyone can or should work for the state.
Profit is good and should be celebrated.

I agree profit is good, so is paying taxes. Too many people in this country pay far to little in tax, which is why pretty much everything is underfunded and falling apart.

The bottom two thirds of earners in the UK pay the lowest effective rate of income taxation in the EU, the top third pay the fifth highest. 

Scot_39

Chrysalis said:

Currently about 45% of my most recent gas bill is on SC.

I calculated the increase of my SC from 1st July on the new Agile tariff is just under 25% of my usage costs on electric.  So the full amount of SC on electric for me will be circa 50% of my usage costs, so about 1/3 of my electric bill.

I expect this will make my average somewhere around 40% across both fuels post July.  Curious what it is for other people.

Wholesale rates continue to move down, if they persist long enough for it to start affecting SVR by a bigger amount, the SC increases are going to stand out more for people I think.

There are network costs of getting the supply to you. 

Some fixed - some arguably a lot less so.  So it's really not just about actual individual use.

The network has a usage / capacity - component. 

And a distribution / population density component.

Even the EPG has manipulated the balance - the last round SC increase was on ave c7p for electric - arguably simply averaged into unit discount based on a daily TDCV of 8kWh. So low users lost - high users - gained.

There's always going to be winners and losers - and some wanting zero SC tariffs and those more than happy to pay a lower unit rate to have network costs shared.

There is AFAIK only 1 regularly linked domestic SC free tariff option in posts here - and they just load the SC into 1st 2kWh daily iirc. Most disappeared as part of Cons Lib energy market / bill simplification exercise - enacted about a decade ago. A comparison complication many simply trusted since to comparison sites - and their bill predictions anyway.

Given the significant costs of upgrading the electric network - e.g. to integrate remote large wind farms brought on shore e.g. off N Coast of Scotland and Islands etc and 100s of smaller ones -  electricity SC are likely to stay high.

And as more people move from gas CH - to eg. ASHP - the gas network costs will fall on fewer customers too.

So SC - or a network cost per unit - is likely to always exist.

But yes at a regional average of near £300pa - for duel fuel - it is a non-trivial overhead.  Bad enough compared to current EPG levels (10%-15%) - awful compared to pre crisis levels (25-30%).

wrf12345

I am moving house soon and will have the gas capped. The house layout allows a single air heat pump to warm the lounge and then filter out to the other rooms in the night (£400-500 for the heat pump, diy install). That saves me nearly £100 in s/c. That is about all I can do against these cartel industries, other than moving abroad (always tempting!).

I am not against profits but the energy industry is limited to 2% on turnover - that means the more turnover it makes the bigger the profit so there is absolutely no incentive towards efficiency but huge incentive to increase costs and the amount consumers hand over. Ofgem, as far as consumers are concerned, is useless and need to be closed down and the relevant minister take control of matters with an ultimate goal of allowing National Grid to sell directly to users who have smart meters (saving 20-30 percent). Tech is going to make these energy retailers (who buy energy for x and sell it for y rather than actually do anything useful like produce energy) obsolete; the sooner the better IMO.

Ebico who had no standing charges and a single price per unit had their successful business model busted when there were changes in how energy caps were applied and they could not offer this as the default and only tariff - whether by incompetent ministers, Ofgem indifference or an industry conspiracy to take them out I have no idea.

matt_drummer

wrf12345 said:

 the relevant minister take control of matters with an ultimate goal of allowing National Grid to sell directly to users who have smart meters (saving 20-30 percent). Tech is going to make these energy retailers (who buy energy for x and sell it for y rather than actually do anything useful like produce energy) obsolete; the sooner the better IMO.

Where is the National Grid going to buy the energy from for less than the current retailers do?

If profits are capped at around 2% then that means that the cost of the energy is around 98% of the unit price we pay.

For this 20 to 30% reduction you talk about the National Grid will have to find a cheaper supplier of energy.

I, like many people I suspect, am really interested to find out where this cheaper energy is coming from.

[Deleted User]

matt_drummer said:

wrf12345 said:

 the relevant minister take control of matters with an ultimate goal of allowing National Grid to sell directly to users who have smart meters (saving 20-30 percent). Tech is going to make these energy retailers (who buy energy for x and sell it for y rather than actually do anything useful like produce energy) obsolete; the sooner the better IMO.

Where is the National Grid going to buy the energy from for less than the current retailers do?

If profits are capped at around 2% then that means that the cost of the energy is around 98% of the unit price we pay.

For this 20 to 30% reduction you talk about the National Grid will have to find a cheaper supplier of energy.

I, like many people I suspect, am really interested to find out where this cheaper energy is coming from.

Maybe the energy prices will stay the same and we'll just subsidise it from the bottomless pit of government money picked off the magic money tree?

[Deleted User]

wrf12345 said:

I am moving house soon and will have the gas capped. The house layout allows a single air heat pump to warm the lounge and then filter out to the other rooms in the night (£400-500 for the heat pump, diy install). That saves me nearly £100 in s/c. That is about all I can do against these cartel industries, other than moving abroad (always tempting!).

I am not against profits but the energy industry is limited to 2% on turnover - that means the more turnover it makes the bigger the profit so there is absolutely no incentive towards efficiency but huge incentive to increase costs and the amount consumers hand over. Ofgem, as far as consumers are concerned, is useless and need to be closed down and the relevant minister take control of matters with an ultimate goal of allowing National Grid to sell directly to users who have smart meters (saving 20-30 percent). Tech is going to make these energy retailers (who buy energy for x and sell it for y rather than actually do anything useful like produce energy) obsolete; the sooner the better IMO.

Ebico who had no standing charges and a single price per unit had their successful business model busted when there were changes in how energy caps were applied and they could not offer this as the default and only tariff - whether by incompetent ministers, Ofgem indifference or an industry conspiracy to take them out I have no idea.

You keep harping on about Ofgem as if it was wholly independent of Government. It is a non-ministerial Government Department that sits within BEIS. Ofgem’s governing body - The Gas and Electricity Markets Authority  - comprises a Board of members directly appointed by The Secretary of State.

If you want electricity and gas to be taken out of private hands then we must expect that it will cost £Bns. Government would have to buy out existing shareholders at their market value plus. Last year, the French Government bought out the last 14% of EDF that it didn’t already own at a cost of £8.5Bn. This was just a small percentage of one company. EDF’s debts last year were forecast to increase to £51Bn which now becomes a French-taxpayer liability.

As you have been told repeatedly, zero standing charge tariffs have failed because the market has changed. A supplier cannot run a profitable business with thousands of consumers who pay them nothing for months of the year because they have PV solar. 

I would be interested to see how you have calculated a 20 to 30% saving to smart meter consumers. If you are going to change an entity into a customer-facing business there are costs in doing this. As suppliers under the Cap are only making 2% profit then a 20 to 30% cost saving is massively over optimistic.

bristolleedsfan

Dolor said:

wrf12345 said:

I am moving house soon and will have the gas capped. The house layout allows a single air heat pump to warm the lounge and then filter out to the other rooms in the night (£400-500 for the heat pump, diy install). That saves me nearly £100 in s/c. That is about all I can do against these cartel industries, other than moving abroad (always tempting!).

I am not against profits but the energy industry is limited to 2% on turnover - that means the more turnover it makes the bigger the profit so there is absolutely no incentive towards efficiency but huge incentive to increase costs and the amount consumers hand over. Ofgem, as far as consumers are concerned, is useless and need to be closed down and the relevant minister take control of matters with an ultimate goal of allowing National Grid to sell directly to users who have smart meters (saving 20-30 percent). Tech is going to make these energy retailers (who buy energy for x and sell it for y rather than actually do anything useful like produce energy) obsolete; the sooner the better IMO.

Ebico who had no standing charges and a single price per unit had their successful business model busted when there were changes in how energy caps were applied and they could not offer this as the default and only tariff - whether by incompetent ministers, Ofgem indifference or an industry conspiracy to take them out I have no idea.

You keep harping on about Ofgem as if it was wholly independent of Government. It is a non-ministerial Government Department that sits within BEIS. Ofgem’s governing body - The Gas and Electricity Markets Authority  - comprises a Board of members directly appointed by The Secretary of State.

Yes, those who are unhappy about level of standing charges might be prudent to use time and energies expressing views via channels that those in power might take notice of rather than merely adding to pages of posts on a consumer orientated forum.

https://www.independent.co.uk/news/uk/home-news/martin-lewis-energy-bills-price-cap-b2343185.html

"On the issue of standing charges, environment secretary Therese Coffey said she expected the government “will continue to look at the different ways that those charges are put through to bill payers”, claiming that there is “considerable support” being given to households struggling with soaring bills"