Paying extra for those who don't / can't pay.

Madasafish1958

Hi, I just signed up and have seen loads of interesting stuff already, but this has been on my mind for while and I have been unable to find any proper onfo. Please can anyone shed a light? or two?
I read somewhere earlier this year that part of everyone's energy bill includes a sum to pay for energy consumed by those who don't / can't pay. 
Can anyone confirm if this is right, how much is it, how is it applied to the bill and is it the same amount for every bill payer or does the amount differ by supplier?

Netexporter

Just look at any of the threads with "standing charge" in the title. There are dozens to choose from.

HumberFlyer

I would imagine it is added into the standing charge...by how much you'll probably never know. I suppose no different from big stores adding x amount to products to cover the cost of theft etc.

Netexporter

If you look on the Ofgem website there will be a pie-chart showing how the SC is distributed.

Stubod

..it's no different to everybody who pays insurance and never needs it...you are paying for those that do....same as tax really.....??

badmemory

Weren't they talking about a further £28 a year but adding it to the bottom of the bill not as part of the standing charge.

bristolleedsfan

Current bad debts costs have been put on unit rate.

https://www.ofgem.gov.uk/sites/default/files/2024-02/Energy-price-cap-additional-debt-costs-review-decision.pdf

lohr500

I get it, but it does seem wrong that those of us who pay our bills on time should be providing insurance for those who don't.
Especially when the suppliers are controlling the payment plans for their customers and are operating as profit making businesses.
Surely debt management should be the suppliers responsibility, not ours?
Has a whiff of wanting your cake and eating it. 

matt_drummer

lohr500 said:

I get it, but it does seem wrong that those of us who pay our bills on time should be providing insurance for those who don't.
Especially when the suppliers are controlling the payment plans for their customers and are operating as profit making businesses.
Surely debt management should be the suppliers responsibility, not ours?
Has a whiff of wanting your cake and eating it. 

I am pretty sure that all suppliers would be happy to manage their debt, but they are not allowed to.

They have to continue to supply energy to people who can't or don't pay.

I don't think it is the energy companies who want cake and to eat it!

Bendo

lohr500 said:

I get it, but it does seem wrong that those of us who pay our bills on time should be providing insurance for those who don't.
Especially when the suppliers are controlling the payment plans for their customers and are operating as profit making businesses.
Surely debt management should be the suppliers responsibility, not ours?
Has a whiff of wanting your cake and eating it. 

What you are missing is that it's always been the case that all consumers pay for those that don't.  It's the same in any business. The difference now in energy supply is that with the price cap, suppliers can't charge what they like to make a profit of their choosing to cover those loses so it has to be factored in as part of the cap.

wrf12345

People in debt who don't pay used to be forced on to prepayment meters, with the debt taken off bit by bit every time they put some money on it (so you might put a tenner on and find a few quid went to the debt and another chunk went towards the s/c) but I think this does not happen so much now as Ofgem or the govn has made it voluntary? Hence the need to take that money off other customers. Oddly, back when it was a nationalised company they would take the meters away when push came to shove, I actually bought a house without gas or electric meters but they did put them back once the deal went through. I am keeping a running tab of these kind of rip-off charges and will adjust my final bill downwards when the opportunity arises... adding to the problem, but there you go.