Martin Lewis: Why are energy standing charges so high? What can be done

MouldyOldDough

Ildhund said:

MouldyOldDough said:

When will standing charges be linked to the actual usage of the power ?

When it becomes reasonable to do so, which I suspect will be never.

You live in a semi-detached house. It costs exactly the same - about £200 a year - to deliver electricity to you as to your neighbours, using just the same cables, substations, pylons and so on that all have to be installed and maintained. If your neighbours are less frugal than you - perhaps a family with a couple of energy-expensive teenagers with their own heated rooms, computers, gaming consoles and televisions - they're probably paying much more than you for the electricity they use. Why should they also pay much more than you towards the delivery costs and other stuff that make up the standing charge? 

You may be able to find a supplier who charges less than £200 a year for delivery, but correspondingly more for each unit of electricity you use.

Not according to the well timed news - heard today

https://www.bbc.co.uk/news/articles/c3vrw4z2y59o

At long last a fairer way of paying for energy

MattMattMattUK

MouldyOldDough said:

Ildhund said:

MouldyOldDough said:

When will standing charges be linked to the actual usage of the power ?

When it becomes reasonable to do so, which I suspect will be never.

You live in a semi-detached house. It costs exactly the same - about £200 a year - to deliver electricity to you as to your neighbours, using just the same cables, substations, pylons and so on that all have to be installed and maintained. If your neighbours are less frugal than you - perhaps a family with a couple of energy-expensive teenagers with their own heated rooms, computers, gaming consoles and televisions - they're probably paying much more than you for the electricity they use. Why should they also pay much more than you towards the delivery costs and other stuff that make up the standing charge? 

You may be able to find a supplier who charges less than £200 a year for delivery, but correspondingly more for each unit of electricity you use.

Not according to the well timed news - heard today

https://www.bbc.co.uk/news/articles/c3vrw4z2y59o

At long last a fairer way of paying for energy

It would be a very odd definition of "fair" to potentially create a situation where one group of customers (those on zero-SC tariffs) are subsidised by everyone else. Almost all of the calls for the zero standing charge tariffs come from two groups, those who do not understand energy bills and those who want to be subsidised. 

DE_612183

MouldyOldDough said:

Ildhund said:

MouldyOldDough said:

When will standing charges be linked to the actual usage of the power ?

When it becomes reasonable to do so, which I suspect will be never.

You live in a semi-detached house. It costs exactly the same - about £200 a year - to deliver electricity to you as to your neighbours, using just the same cables, substations, pylons and so on that all have to be installed and maintained. If your neighbours are less frugal than you - perhaps a family with a couple of energy-expensive teenagers with their own heated rooms, computers, gaming consoles and televisions - they're probably paying much more than you for the electricity they use. Why should they also pay much more than you towards the delivery costs and other stuff that make up the standing charge? 

You may be able to find a supplier who charges less than £200 a year for delivery, but correspondingly more for each unit of electricity you use.

Not according to the well timed news - heard today

https://www.bbc.co.uk/news/articles/c3vrw4z2y59o

At long last a fairer way of paying for energy

Lets see what the unit prices are first.

Electricity companies used to offer these years ago - it was something like:

Normal 5ppu s/c £10 per quarter.

OR

first 1000 units at 7ppu then balance at 5ppu.

If you used less than 500 units you had some benefit - but not a lot. 

molerat

My car needs servicing once a year, it costs the same if I do 3000 miles or 12000 miles, there is a fixed cost to maintaining the car however much I use it, why is the supply of electricity any different.  The bigger problem here is how many other bits have been added on to the standing charge.  OFGEM are at least admitting that many poorer and vulnerable groups will be seriously disadvantaged by moving these costs onto unit charge.  Far too many people don't want to pay their fair share for anything.

Oscarmax

We import approximately 2900 kWh per year, fortunately we export about the same. We charge our battery and PHEV off peak (8.5 pence) approximately 2400 kWh and import approximately 500 kWh peak rate (25 pence).

We pay 61.56 pence a day standing charge, our break even point is approximately an additional 7 pence a kWh

MouldyOldDough

molerat said:

My car needs servicing once a year, it costs the same if I do 3000 miles or 12000 miles, there is a fixed cost to maintaining the car however much I use it, why is the supply of electricity any different.  The bigger problem here is how many other bits have been added on to the standing charge.  OFGEM are at least admitting that many poorer and vulnerable groups will be seriously disadvantaged by moving these costs onto unit charge.  Far too many people don't want to pay their fair share for anything.

So you pay £x for petrol no matter how much you drive it - that seems unfair for those who only drive 3000 miles per year but a better deal for those driving 12000 miles.

debitcardmayhem

MouldyOldDough said:

molerat said:

My car needs servicing once a year, it costs the same if I do 3000 miles or 12000 miles, there is a fixed cost to maintaining the car however much I use it, why is the supply of electricity any different.  The bigger problem here is how many other bits have been added on to the standing charge.  OFGEM are at least admitting that many poorer and vulnerable groups will be seriously disadvantaged by moving these costs onto unit charge.  Far too many people don't want to pay their fair share for anything.

So you pay £x for petrol no matter how much you drive it - that seems unfair for those who only drive 3000 miles per year but a better deal for those driving 12000 miles.

Illogical..

DE_612183

MouldyOldDough said:

molerat said:

My car needs servicing once a year, it costs the same if I do 3000 miles or 12000 miles, there is a fixed cost to maintaining the car however much I use it, why is the supply of electricity any different.  The bigger problem here is how many other bits have been added on to the standing charge.  OFGEM are at least admitting that many poorer and vulnerable groups will be seriously disadvantaged by moving these costs onto unit charge.  Far too many people don't want to pay their fair share for anything.

So you pay £x for petrol no matter how much you drive it - that seems unfair for those who only drive 3000 miles per year but a better deal for those driving 12000 miles.

No, if you drive 3000 miles you pay £800 for Petrol, if you drive 12000 miles you pay £2400 for petrol.

Gerry1

DE_612183 said:

MouldyOldDough said:

molerat said:

My car needs servicing once a year, it costs the same if I do 3000 miles or 12000 miles, there is a fixed cost to maintaining the car however much I use it, why is the supply of electricity any different.  The bigger problem here is how many other bits have been added on to the standing charge.  OFGEM are at least admitting that many poorer and vulnerable groups will be seriously disadvantaged by moving these costs onto unit charge.  Far too many people don't want to pay their fair share for anything.

So you pay £x for petrol no matter how much you drive it - that seems unfair for those who only drive 3000 miles per year but a better deal for those driving 12000 miles.

No, if you drive 3000 miles you pay £800 for Petrol, if you drive 12000 miles you pay £2400 for petrol.

Think I'd have paid £3200 for those 12000 miles...

wrf12345

But you should be paying a fixed charge in addition to the cost per litre when you fill up, otherwise someone filling up a motorcycle or small car is taking an unfair advantage of a Merc owner who would be paying slightly less per litre if there was an additional fixed charge. Same with the supermarket, can't have misers going in there expecting to just spend a quid and not contribute enough to the distribution/heating/pension costs. Just won't do, might show the energy companies up!