Energy prices £250 cheaper a year - my electric only £8.83 cheaper??

MattMattMattUK

silverwhistle said:

PennineAcute said:

Just wondering why people think that high users are wealthy?

Nobody has said that, but the fact is high users can reduce their bills by using less. Low users cannot.

Actually a lot of people have. They tend to ignore the fact that high users are generally pensioners and the highly disabled who are at home a lot. Where as the wealthy are more likely to be low users with solar, batteries and heat pumps. If one is at home a lot and needs to stay warm, or reliant on medical equipment, then reducing energy usage is easier said than done.

silverwhistle said:

So at some of the rates quoted a low user on 3kWh a day is paying ~45p a unit and a higher user at 15 units is paying ~27p a unit. 

No they are not, they are paying a standing charge for their grid connection and unit rate for their energy usage. 

silverwhistle said:
Which of the two is making more demands on the system and requiring more plant to meet their demand? 

The higher user, hence the transmission cost element in the unit rate.

silverwhistle said:
High standing charges are patently regressive.

It is not, it is flat. For one connection everyone pays one standing charge. For every unit used everyone pays the same unit rate, that is flat, not progressive or regressive. 

MattMattMattUK

Chris_b2z said:

The_Green_Hornet said:

MWT said:

The_Green_Hornet said:

If you can provide the link to this on the Ofgem website then you will be helping a lot of these people who are having difficulty finding it.

Mind you telling consumers that their standing charge has gone up mainly due to 1) Government social and environment schemes and 2) to make sure prepayment and Direct Debit customers pay the same standing charge won't go down too well, especially when they keep getting told on here that it is due to the fixed cost of delivering energy to their properties increasing.

That MSE article is an excellent read for anyone wanting an unbiased view of how standing charges are currently being implemented by Ofgem. Thank you.

It is far from unbiased, although that it does at least recognise that Citizen's Advice point out that loading costs from the standing charges to unit rates would be highly negative for pensioners and the disabled.

Chris_b2z said:

I also chuckled at the poll results where 11,100 people were asked for their opinion on standing charges. Only 151 (1.4%) agree with standing charges being increased in order to reduce the unit rates, yet the MSE Energy forum seems to be in a parallel universe where the majority of posters appear to approve. How very, very spooky!

It was not demographically representative sample, neither did it require anyone to demonstrate a level of understanding first. It would have largely been made up of people who thought that someone else should pay for the costs so that they get something cheaper. There are some people on here who have taken the time to understand the issue, rather than taking a simplistic and selfish view on a subject which they have little or no understanding of.

MWT

MattMattMattUK said:

silverwhistle said:
High standing charges are patently regressive.

It is not, it is flat. For one connection everyone pays one standing charge. For every unit used everyone pays the same unit rate, that is flat, not progressive or regressive. 

Agreed, unless people are also going to claim that the price of a loaf of bread is 'regressive'...

MWT

Chris_b2z said:

MWT said:

The_Green_Hornet said:

If you can provide the link to this on the Ofgem website then you will be helping a lot of these people who are having difficulty finding it.

This comes close - https://www.ofgem.gov.uk/energy-price-capIt shows the breakdown of the cap figure that the news outlets quote when they refer to the 'saving' through the reduction in the cap.

Everything else, including the spreadsheets with base data by region etc. is here:

https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/energy-price-cap-default-tariff-policy/energy-price-cap-default-tariff-levels

This is about the 10th time that someone has provided a link to the breakdown summary of the Ofgem SVT cap in response to a question asking specifically about the standing charge. I think we can assume the requested information is not released for public consumption.

... or you could just go look at the link at the bottom of my post where the spreadsheets with the base data can be found...  it is all in the public domain, in full detail.

silverwhistle

MattMattMattUK said:

It is not, it is flat. For one connection everyone pays one standing charge. For every unit used everyone pays the same unit rate, that is flat, not progressive or regressive. 

Do I really have to rephrase my comment for your benefit? The impact of such a pricing regime is regressive. There has been a change to the weighting and the multiplier between the cost of a unit and the standing charge: from approximately 2 kWh to 3  and that has had a greater impact on lower users who invariably (if not always) are less well off.

Just for the benefit of others that may be reading 'regressive', when it comes to tax is "taking a proportionally greater amount from those on lower incomes".

hamski

MattMattMattUK said:

silverwhistle said:

PennineAcute said:

Just wondering why people think that high users are wealthy?

Nobody has said that, but the fact is high users can reduce their bills by using less. Low users cannot.

Actually a lot of people have. They tend to ignore the fact that high users are generally pensioners and the highly disabled who are at home a lot. Where as the wealthy are more likely to be low users with solar, batteries and heat pumps. If one is at home a lot and needs to stay warm, or reliant on medical equipment, then reducing energy usage is easier said than done.

silverwhistle said:

So at some of the rates quoted a low user on 3kWh a day is paying ~45p a unit and a higher user at 15 units is paying ~27p a unit. 

No they are not, they are paying a standing charge for their grid connection and unit rate for their energy usage. 

silverwhistle said:
Which of the two is making more demands on the system and requiring more plant to meet their demand? 

The higher user, hence the transmission cost element in the unit rate.

silverwhistle said:
High standing charges are patently regressive.

It is not, it is flat. For one connection everyone pays one standing charge. For every unit used everyone pays the same unit rate, that is flat, not progressive or regressive. 

But the sc is different depending on where you live

MattMattMattUK

silverwhistle said:

MattMattMattUK said:

It is not, it is flat. For one connection everyone pays one standing charge. For every unit used everyone pays the same unit rate, that is flat, not progressive or regressive. 

Do I really have to rephrase my comment for your benefit? The impact of such a pricing regime is regressive. 

You can rephrase it because it was factually incorrect if you like, though that would be for your benefit, not mine.

silverwhistle said:
There has been a change to the weighting and the multiplier between the cost of a unit and the standing charge: from approximately 2 kWh to 3  

That has happened, so have other changes, change is constant.

silverwhistle said:
and that has had a greater impact on lower users who invariably (if not always) are less well off.

The lowest users are generally well off, those with solar, batteries, heat pumps and well insulated homes. If you took the time to read the report published by Citizen's Advice on the impact of the standing charge you would see that transferring costs from the standing charge to unit rates would have a detrimental impact on those on low incomes and benefit those able to afford solar and other upgrades. 

Chris_b2z

MattMattMattUK said:

The lowest users are generally well off, those with solar, batteries, heat pumps and well insulated homes. If you took the time to read the report published by Citizen's Advice on the impact of the standing charge you would see that transferring costs from the standing charge to unit rates would have a detrimental impact on those on low incomes and benefit those able to afford solar and other upgrades. 

Fortunately, we have Martin Lewis on the case. I think he has taken the time to read the Citizen's Advice report -

https://twitter.com/MartinSLewis/status/1768662734495760792

His suggestion is to -
A. lower standing charges as its a moral hazard and
B. at the same time provide specific help to those vulnerable higher users when you do

MattMattMattUK

Chris_b2z said:

MattMattMattUK said:

The lowest users are generally well off, those with solar, batteries, heat pumps and well insulated homes. If you took the time to read the report published by Citizen's Advice on the impact of the standing charge you would see that transferring costs from the standing charge to unit rates would have a detrimental impact on those on low incomes and benefit those able to afford solar and other upgrades. 

Fortunately, we have Martin Lewis on the case. I think he has taken the time to read the Citizen's Advice report -

https://twitter.com/MartinSLewis/status/1768662734495760792

His suggestion is to -
A. lower standing charges as its a moral hazard and
B. at the same time provide specific help to those vulnerable higher users when you do

You conveniently chose not to post the important subsequent paragraphs of his post.

The problem is Ofgem is responsible for A and the government is responsible for B.

Yet these things don't usually work in concert (I've an imminent meeting with Sec of State for energy where I will be pushing for just that) so Ofgem will struggle to decide to drop standing charges without factoring in the vulnerable high users because it has no power to do anything about that independently.

So it would have to decide to drop standing charges, and hope the govt does something, but that is unlikely to be a route regulators can base their decisions on. Which is why I'm worried unless the two act together, nothing will happen.

I agree Martin gets a lot right, but he does also like the occasional populist crusade as well, he jumped on this bandwagon and jumped on the WASPI (WASPE) bandwagon as well, both are a great way to get some devout followers, both are great marketing positions, neither are rational policy decisions.

Chris_b2z

MattMattMattUK said:

You conveniently chose not to post the important subsequent paragraphs of his post.

The problem is Ofgem is responsible for A and the government is responsible for B.

Yet these things don't usually work in concert (I've an imminent meeting with Sec of State for energy where I will be pushing for just that) so Ofgem will struggle to decide to drop standing charges without factoring in the vulnerable high users because it has no power to do anything about that independently.

So it would have to decide to drop standing charges, and hope the govt does something, but that is unlikely to be a route regulators can base their decisions on. Which is why I'm worried unless the two act together, nothing will happen.

I agree Martin gets a lot right, but he does also like the occasional populist crusade as well, he jumped on this bandwagon and jumped on the WASPI (WASPE) bandwagon as well, both are a great way to get some devout followers, both are great marketing positions, neither are rational policy decisions.

I share Martin's frustration that he is unlikely to succeed.
I can also understand why the industry would prefer to discredit his sincere efforts.