standing charge

twopenny

Why not have the standing charge as a proportion of the bill?

That would allow and encourage people to who need to to budget.

I'm fine with a standing charge but not to the extent it is now where it's the same as my usage.

ArbitraryRandom

TheElectricCow said:

wrf12345 said:

It will only become a political issue if one of the parties has the wit to promote the ending of UK fixed costs (standing charges, council tax, TV licence) that would save households around £2000 a year but with MPs on over 80k a year they are unlikely to be too bothered with such "paltry" savings even though it could be done in a way that costs the government nothing.

Could you expand upon your idea for removing all these costs to households while not costing the government anything? I’d be very interested in hearing how this would work, it sounds like your proposal would be really beneficial to everyone if we can get all these services and utilities for free without anyone having to pay for them either directly or through taxation. 

I don't know the logic the poster is using, but I have before discussed (and been somewhat persuaded) of the benefits of reviewing what's paid for indirectly (such as social care via council tax) and what's paid for via direct tax. 

For example, in a deprived area council taxes tend to be lower, but so does unemployment and population health - meaning more demand for adult and child services but limited capacity for revenue generation... so all available funding goes on essentials, and is topped up centrally (previously via EU grants). Compared to a 'nicer' area where there's less demand and more revenue to be generated, so it can be spent providing services that provide a wider benefit. 

If 'essential' services were funded centrally then any funds raised locally could be used on improving local services where all residents can see the benefit (leading to less resentment). It would also lead to greater awareness of the cost of services such as social care and (hopefully) a political drive to address some of the wider systemic issues they can currently ignore because they can blame it on local government. 

EssexHebridean

twopenny said:

Why not have the standing charge as a proportion of the bill?

That would allow and encourage people to who need to to budget.

I'm fine with a standing charge but not to the extent it is now where it's the same as my usage.

Because that would potentially mean that someone struggling to get by in an old property which is harder to heat and so costs more to run, perhaps relying on storage heaters because there is no gas in their area (or worse - panel heaters because they were cheaper for the landlord to buy and heck, HE doesn't care about the running costs!), would end up paying a higher proportion than someone well off enough to afford a brand new built to top-spec on heat-retention etc property and so using far less energy. In fact, that second person might even be wasting energy left right and centre because they can, but still their bills would be lower as the big driver for the other parties costs would be their expensive to run heating. 

To suggest that it comes down to people "needing to budget" is a bit of an oversimplification, and would be quite the insult to person 1 above. 

However, if you are genuinely only using a tiny amount of energy each day, then it might work better for you to switch to a supplier like Utilita, where the SC is covered by way of higher initial unit rates, with subsequent unit rates then being less. If you use no energy at all one day then you would pay no standing charge for that day. 

dealyboy

@pseudodox said:

Standing charges are a sting in the tail for everyone & more especially seem out of proportion for low users.  However I regard them as funding the service supply that I want to have instantly available on demand.  My car sits in the garage most of the time, but it is costing me road tax, insurance, annual MOT/service.  These costs are the same whether I drive 500, 5,000 or 10,000 miles.  It is instantly available for my use & all I have to do is fill it with petrol when I do want to travel.  Annual running costs per mile are much higher if I only ever go to the local shops.  But lower if I do a lot of mileage.  I continue to pay the fixed costs even if I cannot afford a tank of fuel.  So really no different to energy standing charges.

... ditto ... I was reading down to see if anybody had made my point ... sorry your point 

maxiemaxie

Standing charges are only one way of recouping infrastructure costs. It's convenient for supply industries because it allows them to compare the cost of maintenance, modernisation and expansion against a set sum per customer, even more so in the dim and distant when we had geographic monopolies.

But it's far from the only charging model there is. For instance, there is no standing charge on new cars despite the high costs of manufacturing infrastructure, plant, tooling... you pay for the car, the manufacturer sets the price to cover their costs. Ignoring financing of course.

If, as they once did, the electricity industry could offer no standing charge tariffs alongside those with standing charge. And make a profit on both, then so could any supply industry.

In the case of energy you might almost believe that the regulator and their bosses have made the market anti competetive.

dunstonh

But it's far from the only charging model there is. For instance, there is no standing charge on new cars despite the high costs of manufacturing infrastructure, plant, tooling... you pay for the car, the manufacturer sets the price to cover their costs. Ignoring financing of course.

Cars are a one shot sale.   Energy supply is an ongoing service.   So, you cannot compare those two.

MattMattMattUK

maxiemaxie said:

Standing charges are only one way of recouping infrastructure costs. It's convenient for supply industries because it allows them to compare the cost of maintenance, modernisation and expansion against a set sum per customer, even more so in the dim and distant when we had geographic monopolies.

But it's far from the only charging model there is. For instance, there is no standing charge on new cars despite the high costs of manufacturing infrastructure, plant, tooling... you pay for the car, the manufacturer sets the price to cover their costs. Ignoring financing of course.

That is a totally different business model, for a totally different product. Energy suppliers are required to maintain a connection to your premises, you are able to draw on demand for most domestic premises up to 100 amps without issue, they are have to bill you after supply and after building and maintaining that connection and they have to maintain it whether you use it or not, hence the standing charge. The car however you buy when you choose, you pay in advance (or the finance company does and you repay the finance company), they do not have to maintain a production line for cars that terminates in your living room and you cannot have an unlimited supply of cars rolling out the end of a cable for you to consume at will. You are not even comparing apples and oranges, you are comparing apples and industrial drills.

maxiemaxie said:

If, as they once did, the electricity industry could offer no standing charge tariffs alongside those with standing charge. And make a profit on both, then so could any supply industry.

They did, historically, however the data now indicates that if they did so now they would lose money, significant amounts, hence why no major player offers one. If there was demand there for one and it was profitable then it would be available, but it is not profitable so they do not offer them.

maxiemaxie said:

In the case of energy you might almost believe that the regulator and their bosses have made the market anti competetive.

The price cap is anti-competitive but actually benefits the consumer because it holds prices lower than they would otherwise likely be at the moment. The price cap also does not impact the ability of suppliers to offer zero standing charge tariffs as they could offer those as a fix if they wish, which are not subject to the price cap. 

LeslieAlan42

With more homes with solar panels with battery storage is the way forward to stop Fossil fuels are non-renewable sources of energy that will eventually run out. According to different estimates, oil can last up to 50 years, natural gas up to 53 years, and coal up to 114 years. However, if we keep burning fossil fuels at our current rate, we may deplete them by 2060. Therefore, it is important to switch to renewable energy sources before we run out of fossil fuels.
With my 3.14Kw panels with a 9.9Kw battery storage system, my May 2024 power bill was £42.50 (£14.50 of which was SC) for a 5 bedroom end of terries with 3 adult, 2 freezer's 2 frieze 4 screens 4 computers with Gas Central Heating & Gas Hob.
I have had a full battery for 5 days in March 2024, 7 days in April, 10 days in May, with June so far giving me 17 day out of last 19 days with a full battery i.e £0 electric cost . I expected July Aug Sep giving me around 70+ days per year of £0 electric power cost. With +25 days of 3/4 full up to 19/6/24.
One big down side is that I can't generate Gas at present so the full gas unit price applies. (Make my home fully electric would remove this problem. I look into a air source heat pump but that would not be cost effective with my low yearly Gas cost i.e. £7.8K for 30 years) Giving me a ball park finger of < £1010 power bill for a year with Utilita.  £84.20 per month - Warm Home Discount Scheme = £71.70 per month.
With a fully fitted 4Kw panels with a 9.9Kw battery storage system with 0 VAT now could be yours for around £10k with Smart Export Guarantee (SEG) scheme that should pay back that cost in 11years follow by 14 year of pure profit.
We need to turn green to save our children and our gran children + the planet. 

lohr500

Out of interest, how many units were you billed for in May and how does that compare to a comparable month before you got the solar panels/battery?

Are you suggesting the panels/battery will have a 25 year lifespan with zero maintenance costs?

matelodave

LeslieAlan42 said:

With more homes with solar panels with battery storage is the way forward to stop Fossil fuels are non-renewable sources of energy that will eventually run out. According to different estimates, oil can last up to 50 years, natural gas up to 53 years, and coal up to 114 years. However, if we keep burning fossil fuels at our current rate, we may deplete them by 2060. Therefore, it is important to switch to renewable energy sources before we run out of fossil fuels.
With my 3.14Kw panels with a 9.9Kw battery storage system, my May 2024 power bill was £42.50 (£14.50 of which was SC) for a 5 bedroom end of terries with 3 adult, 2 freezer's 2 frieze 4 screens 4 computers with Gas Central Heating & Gas Hob.
I have had a full battery for 5 days in March 2024, 7 days in April, 10 days in May, with June so far giving me 17 day out of last 19 days with a full battery i.e £0 electric cost . I expected July Aug Sep giving me around 70+ days per year of £0 electric power cost. With +25 days of 3/4 full up to 19/6/24.
One big down side is that I can't generate Gas at present so the full gas unit price applies. (Make my home fully electric would remove this problem. I look into a air source heat pump but that would not be cost effective with my low yearly Gas cost i.e. £7.8K for 30 years) Giving me a ball park finger of < £1010 power bill for a year with Utilita.  £84.20 per month - Warm Home Discount Scheme = £71.70 per month.
With a fully fitted 4Kw panels with a 9.9Kw battery storage system with 0 VAT now could be yours for around £10k with Smart Export Guarantee (SEG) scheme that should pay back that cost in 11years follow by 14 year of pure profit.
We need to turn green to save our children and our gran children + the planet. 

that sounds pretty good but, going by your figures, I'd be around 88 (if I live that long) and the future purchaser of my house would gain the 14 years of profit.

TBH I'd rather squander my £10k rather than putting it on the roof for someone else to benefit