Standing Charges Ofgem review

Novice_investor101

The linked article below states Ofgem are inviting comments on the impact rising standing charges are having on peoples finances. Very welcome, I think. 

I personally believe they are now getting excessive, & yes I do understand why they exist. But I now pay £25 a month before I’ve even used any electricity or gas when previously £50 a month actually covered the SC & all my usage. 

https://www.bbc.co.uk/news/business-67431758

People can submit their views via email to StandingCharges@ofgem.gov.uk by 19 January.

MattMattMattUK

Interesting, I might actually take the time to suggest that they keep a rational, logical system, with fixed costs of the network attributed to a fixed element in the bill and variable costs attributed to a variable element based on consumption, currently the Standing Charge and the per kWh unit rate. 

dealyboy

I know that Ofgem has believed for some time that the SC has become a bloated catchall, I agree.

I don't think there will be big moves as a result of the review, the money has to come from somewhere to pay for policies and the payment method is highly contentious if this board is anything to go by.

I don't think any change will happen quickly either considering where we are in the political cycle, nobody will want to rock the boat!

70sbudgie

There is so much infrastructure works going on that needs to be paid for. The only way I can see the SC reducing is if government funds some of the policies from general taxation (moves them out of the SC).

ElaniArtin

I know this has been discussed before, but thought this good enough for a refresh...make voice heard at ofgem, show that we are watching and care about the outcome.

Ofgem looking at standing charges and reportedly has a limited time open channel. All you intelligent informed MSE people have an opportunity to make your case.

StandingCharges@ofgem.gov.uk

TheElectricCow

It makes sense to keep the current system of standing charges as far as fixed grid connection and infrastructure costs are concerned - everyone pays for the costs that can be reasonably attributed to the actual cost of providing an energy supply per individual connection.

But I do believe things like the socialised policy aspects of the SC (i.e. costs not related to supplying energy/improving the network) are better off being collected elsewhere. I’d prefer my energy bills be related to energy, and state welfare be handled by the government via the systems already in place for the funding of those welfare systems. Of course the effectiveness of such systems are an entirely separate discussion which is the responsibility of said government to address.

mmmmikey

TheElectricCow said:

It makes sense to keep the current system of standing charges as far as fixed grid connection and infrastructure costs are concerned - everyone pays for the costs that can be reasonably attributed to the actual cost of providing an energy supply per individual connection.

But I do believe things like the socialised policy aspects of the SC (i.e. costs not related to supplying energy/improving the network) are better off being collected elsewhere. I’d prefer my energy bills be related to energy, and state welfare be handled by the government via the systems already in place for the funding of those welfare systems. Of course the effectiveness of such systems are an entirely separate discussion which is the responsibility of said government to address.

I am in 100% agreement with this. Unfortunately, like so many things at the moment, the debate seems to have become polarised with many folks either wanting no change at all or standing charges to be abolished. In my view, the middle ground you suggest is the way to go.

Robin9

I will also be commenting from the Business/Charity point of view.

I handle the energy contracts for my local Church and Church Hall.   Gas s/c is £4.77 per DAY (DOWN from £9.08) and Electricity s/c is £1.61 per DAY (UP from £1.54) . I cannot understand - , our meters and supply cable are very similar to the ones that come into my house - why should the s/c's  be any different.  ?

PS Unit rates have plunged - gas is down 40%, electric 60%

dunstonh

I handle the energy contracts for my local Church and Church Hall.   Gas s/c is £4.77 per DAY (DOWN from £9.08) and Electricity s/c is £1.61 per DAY (UP from £1.54) . I cannot understand - , our meters and supply cable are very similar to the ones that come into my house - why should the s/c's  be any different.  ?

Business connections tend to be more advanced than residential due to their higher energy needs.  Whilst yours may be at the simpler end, these things tend to be averaged over all businesses.  

Shedman

Link to Ofgem info and discussion paper 

https://www.ofgem.gov.uk/publications/standing-charges-call-input

wrf12345

complete waste of time, Ofgem have no interest in helping consumers, need to contact the new energy minister as getting rid of standing charges and council tax is pure electioneering and the only way the current mob will get re-elected.