Standing Charges Ofgem review

boatman

What were the average standings charges 5 and 10 years ago?

If they managed to run the company at those prices then, then allow for inflation and set them at that level.

MultiFuelBurner

boatman said:

What were the average standings charges 5 and 10 years ago?

If they managed to run the company at those prices then, then allow for inflation and set them at that level.

That doesn't account for the massive expansion in renewables feeding into the grid and of course the controversial energy companies that went bust and no one lost their credit held in those accounts. You have to add that in as well as inflation and probably others things too.

Sadly not that simple as faceXgram may have many believe.

Scot_39

boatman said:

What were the average standings charges 5 and 10 years ago?

If they managed to run the company at those prices then, then allow for inflation and set them at that level.

Inflation isn't the only thing driving grid costs.

Govt green policy changes now largely driving the agenda.

[Much - like decarbonisation levies - currently loaded on remaining coal and gas electric generation, not anywhere similar on domestic gas or oil boiler emissions.  They just plan to scrap these over time - but ashp even with now c7.5k? carrot roll out not going to plan - so sticks will come.  Just look at Harvey et al proposals in Scotland re EPC penalties etc.]

Net zero, renewables, grid and generation capacity readiness for BEV - not ICE (diesel / petrol), and switch from gas central heating, cooking etc to ashp/ electric.

Projects like egl1, egl2 adding GW of transmission capacity over literally 100s of miles accordingly. 

When grid and I suspect if anything potentially more disruptive work - the local lower voltage distribution networks - to local lv substations and homes - needs £10s bn spent on it - those charges are ultimately recoverable from us.

How it's done is not trivial.

Balancing fixed and capacity cost components is complex.

Fairness is subjective.

But when Ofgem arguably loads it's regulatory failings on us all, via SoLR charges - then it is understandable why many are sceptical of its capabilities, its motivations.
But there is also danger in exposing things like this to the mercy of political populism or morality arguments.

There are no easy answers.

If you disagree - but arguably equally important if you agree - with current standing charges -  then by all means - take part in consultation.

Ordinary mortals aren't normally given access to influence Ofgem policy decisions.

born_again

twopenny said:

Could the standing charge not be related to the amount of fuel you use?

Frankly it makes my head hurt just trying to understand some of the points put across in this and the other thread.

I've always felt comfortable that increase in costs just mean managing my usage.

Now I cut back, making my life fairly miserable, only for it to be less than the standing charge - and that's without the vat.

No one has looked at my meters or pipes or done anything to them in 50yrs between this house and the last.

So presumably it's about supply.

Which is unecconmical.

Well round here in the last 10 years Gas has dug up more roads that anything else laying new pipes. Including to houses. 

wild666

believe the standing charges were introduced in the 70's as a short term measure but they have never being scrapped. Energy suppliers must be rubbing their hands with glee that most people are paying £300 for using no electric or gas, or £180 for those that just use electric. 
I would rather see a her higher kWh charge on both electric and gas worked out on average daily usage, that would be about 6p on the electric and 1p on the gas. Low users would benefit and high users would lose out. This could make users find ways of using less electric and gas.

Notepad_Phil

wild666 said:

believe the standing charges were introduced in the 70's as a short term measure but they have never being scrapped. Energy suppliers must be rubbing their hands with glee that most people are paying £300 for using no electric or gas, or £180 for those that just use electric. 
I would rather see a her higher kWh charge on both electric and gas worked out on average daily usage, that would be about 6p on the electric and 1p on the gas. Low users would benefit and high users would lose out. This could make users find ways of using less electric and gas.

So e.g. retired people who are at home all day will have to pay more on this alternative to standing charges than someone who is out all day and can afford solar panels to generate electricity to run their household whilst also getting a decent amount from selling it back to the grid.

dunstonh

wild666 said:

believe the standing charges were introduced in the 70's as a short term measure but they have never being scrapped. Energy suppliers must be rubbing their hands with glee that most people are paying £300 for using no electric or gas, or £180 for those that just use electric. 
I would rather see a her higher kWh charge on both electric and gas worked out on average daily usage, that would be about 6p on the electric and 1p on the gas. Low users would benefit and high users would lose out. This could make users find ways of using less electric and gas.

That is quite a regressive policy.

It would favour those that have installed solar panels.  Generally more wealthy people who, ironically have increased costs to the infrastructure to allow small scale generation and supply.

It would harm poorer people, many of whom are on electrical heating and economy 7 heating systems who draw a lot of energy when the grid has excess supply.

People already pay for the energy they use in the unit price.  Use less and you pay less.      How is getting those people to pay for lower users a fair way to do it?

Krakkkers

Yes, nobody should do anything to help themselves and high users should carry on with no regard.

Chrysalis

dunstonh said:

wild666 said:

believe the standing charges were introduced in the 70's as a short term measure but they have never being scrapped. Energy suppliers must be rubbing their hands with glee that most people are paying £300 for using no electric or gas, or £180 for those that just use electric. 
I would rather see a her higher kWh charge on both electric and gas worked out on average daily usage, that would be about 6p on the electric and 1p on the gas. Low users would benefit and high users would lose out. This could make users find ways of using less electric and gas.

That is quite a regressive policy.

It would favour those that have installed solar panels.  Generally more wealthy people who, ironically have increased costs to the infrastructure to allow small scale generation and supply.

It would harm poorer people, many of whom are on electrical heating and economy 7 heating systems who draw a lot of energy when the grid has excess supply.

People already pay for the energy they use in the unit price.  Use less and you pay less.      How is getting those people to pay for lower users a fair way to do it?

Maybe, but I have the opinion standing charges hurt poorer people more as they are the ones more likely to be light users as a whole, we are seeing the extreme measures people are going to like reading with a torch or candle light.  Also bear in mind it does take some time for these solar panel install to start paying off (assuming they not been installed via a grant).

I think those stuck with inefficient heating, lack of ability to install panels etc. perhaps need some help outside of this scope, but with the government current drive to take everything possible from the poorest in the country right now, that's not forthcoming.  So what is perhaps(?) within Ofgem's scope is potentially on top of reduced SC to also add a social tariff, or to tell suppliers to offer a a high SC option for people who think they will benefit from the existing system.

My reply on the Ofgem consultation is to keep SC for fixed costs as well as social schemes, move variable costs to unit rate, and remove certain things entirely such as SOLR (move to isolation), debt recovery (we have a court system for this, and can prevent as bad debt build up by sorting out all the fixed DD issues), inefficiency margin, supplier costs.

I also suggested they use council tax data to apply a single person discount when the household is registered for a single adult on council tax records to make the unfairness a little less unfair.

My reply also has a lot in there about the current amount of waste such as deploying smart meters currently that will need to have modems replaced within a few years due to the 3G turn off. If they get their house in order a certain amount ca be cut without any repercussions to anyone.

Scot_39

wild666 said:

believe the standing charges were introduced in the 70's as a short term measure but they have never being scrapped. Energy suppliers must be rubbing their hands with glee that most people are paying £300 for using no electric or gas, or £180 for those that just use electric. 
I would rather see a her higher kWh charge on both electric and gas worked out on average daily usage, that would be about 6p on the electric and 1p on the gas. Low users would benefit and high users would lose out. This could make users find ways of using less electric and gas.

Energy suppliers do not keep the standing charges.