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

179111213

Comments

  • MattMattMattUK
    MattMattMattUK Forumite Posts: 7,686
    1,000 Posts Third Anniversary Name Dropper
    Forumite
    schmorgs said:
    I got a letter from British Gas today congratulating me on signing up to their standard variable tariff (I didn't but hey), and that energy prices are coming down in Oct.

    The Gas and Electric unit price is down approximately 10%, but the Electricity standing charge is going up 40%.  

    I don't pretend to understand all the mechanics of what this covers, but all they have done here is decreased energy cost (because they have to) and increased standing charge (because they can).

    Shocking (pun intended)
    The unit rate and the standing charge on the SVT are set by Ofgem under the price cap, the suppliers cannot increase the standing charge at will. The suppliers do not get to keep the standing charge.
  • QrizB
    QrizB Forumite Posts: 12,449
    10,000 Posts Second Anniversary Photogenic Name Dropper
    Forumite
    edited 15 September at 1:13PM
    schmorgs said:
    The Gas and Electric unit price is down approximately 10%, but the Electricity standing charge is going up 40%.
    Looking at the July and October price cap tables, I don't think there's a region where the electricity standing charge has increased by 40%. For most regions, the increase was less than 1%.
    @schmorgs was your previous tariff a fixed rate, or the standard variable? Which energy supply region are you in?

    N. Hampshire, he/him. Octopus Go elec & Tracker gas / Shell BB / Lyca mobi. Ripple Kirk Hill member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 30MWh generated, long-term average 2.6 Os.
    Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs.
  • Lyncj01
    Lyncj01 Forumite Posts: 29
    Fifth Anniversary 10 Posts Combo Breaker
    Forumite
    E (Gas & Electricity) Ltd. also offer a no standing charge tariff for all smart meter prepayment customers - have done for years. They are often cheaper than Utilita and they answer the phone when you call them! 
  • cmm2009
    cmm2009 Forumite Posts: 1
    First Post
    Newbie
    Re. High Cost of Standing Charges.  SCs were raised to cover the cost to suppliers taking on the customers of those  ca.27 suppliers who went under, including the cost of their deluded trading on the energy markets.  Guardian article of 6th March 2022 quotes Andrew Enzor, managing consultant at Cornwall Insight (ML's go-to company): “Regulatory changes ordered by Ofgem were already set to add around £30 to each customer’s standing charge.  Since then, there have been a wave of company failures, with each one requiring a bailout, the cost of which is being shared by all consumers.  We calculate the cost will add a further £35 a year per household. Both of these are added to electricity bills, at a time when households can least afford it.”   I did my sums and reckoned I had paid my share of the cost of dealing with the transfer of customers by July of this year and yet my SCs have gone up again.  More strength to ML and his campaign to highlight this scandal.
  • ArbitraryRandom
    ArbitraryRandom Forumite Posts: 1,683
    1,000 Posts Fourth Anniversary Homepage Hero Name Dropper
    Forumite
    cmm2009 said:
    Re. High Cost of Standing Charges.  SCs were raised to cover the cost to suppliers taking on the customers of those  ca.27 suppliers who went under, including the cost of their deluded trading on the energy markets.  Guardian article of 6th March 2022 quotes Andrew Enzor, managing consultant at Cornwall Insight (ML's go-to company): “Regulatory changes ordered by Ofgem were already set to add around £30 to each customer’s standing charge.  Since then, there have been a wave of company failures, with each one requiring a bailout, the cost of which is being shared by all consumers.  We calculate the cost will add a further £35 a year per household. Both of these are added to electricity bills, at a time when households can least afford it.”   I did my sums and reckoned I had paid my share of the cost of dealing with the transfer of customers by July of this year and yet my SCs have gone up again.  More strength to ML and his campaign to highlight this scandal.
    This is the breakdown of the 'average' cap rate, inc standing charge. I'm not sure what element specifically you think is a scandal? 

    From 1 October the equivalent per unit level of the price cap to the nearest pence for a typical customer paying by direct debit will be 27.35p per kWh for electricity customers and a standing charge of 53.37p per day. The equivalent per unit level for a typical electricity muti-register customer is 26.26p per kWh and with a standing charge of 53.36p per day. The equivalent per unit level for a typical gas customer is 6.89p per kWh with a standing charge of 29.62p per day.     



    https://www.ofgem.gov.uk/publications/energy-prices-fall-again-winter
    I'm not an early bird or a night owl; I’m some form of permanently exhausted pigeon.
  • michelleduer
    michelleduer Forumite Posts: 6
    Part of the Furniture First Post Combo Breaker
    Forumite
    I'm a low user yet pay almost double the standing charge on my electricity here in the North West compared to a customer in London. How is this fair? 
  • MattMattMattUK
    MattMattMattUK Forumite Posts: 7,686
    1,000 Posts Third Anniversary Name Dropper
    Forumite
    I'm a low user yet pay almost double the standing charge on my electricity here in the North West compared to a customer in London. How is this fair? 
    Network costs per dwelling higher in the North West than in London, there are a lot more miles of cable per dwelling and a lot fewer dwellings per transformer in the North West than in London. 
  • theDG
    theDG Forumite Posts: 5
    Third Anniversary First Post
    Forumite
    I have a small shop and the standing charge form Scottish power is 192p £1.92
  • MattMattMattUK
    MattMattMattUK Forumite Posts: 7,686
    1,000 Posts Third Anniversary Name Dropper
    Forumite
    theDG said:
    I have a small shop and the standing charge form Scottish power is 192p £1.92
    Commercial tariffs are not subject to the price cap and can vary wildly, both in unit costs and standing charges. 
  • Gerry1
    Gerry1 Forumite Posts: 9,480
    Part of the Furniture 1,000 Posts Name Dropper
    Forumite
    I'm a low user yet pay almost double the standing charge on my electricity here in the North West compared to a customer in London. How is this fair? 
    Renting a property in London probably costs twice as much as in the North West, so it's just swings and roundabouts.
Meet your Ambassadors

Categories

  • All Categories
  • 340.2K Banking & Borrowing
  • 249.1K Reduce Debt & Boost Income
  • 448.4K Spending & Discounts
  • 232K Work, Benefits & Business
  • 603.3K Mortgages, Homes & Bills
  • 171.7K Life & Family
  • 245.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards