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Energy standing Charges - OFGEM's inability to address unfair standing charges on consumers
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BarelySentientAI said:
Part of the problem with the regulators is that people misunderstand their role. They are not there to make everything as cheap as possible for customers focusing only on the immediate term. Your paraphrase is pretty accurate - to balance profit against the interests of the customers - or perhaps to balance the long term needs of the customers against the immediate costs. We already have problems with short term thinking then requiring urgent and expensive actions, I wouldn't want to make it worse by turning the regulator into a customer advocacy group.
I don't think that's a case of people wanting cheaper water but rather a case of people wanting these companies, who have a monopoly, to act in the interest of everyone to ensure they perform as expected rather than syphoning off as much cash as possible an then saying we all have to pay more for things to work properly.
The grid appears similar, granted no sewage but a monopoly with high debt, decent profits and dividends suddenly saying the network they manage needs significant work that we all have to pay for.
I don't think the average reasonable person would see these industries as acting in the interests of the majority.BarelySentientAI said:
I accept your point that a plausible outcome would be for everything to be funded by central government - but the same argument could be made for almost any expenditure and it's not necessarily a good thing.
Micro plastics are everywhere but farmers are still covering fields in sheets of plastic to ensure early growth of their crops with those plastics at best not being recycled and at worst breaking down into the soil that is growing the food we eat, that's without wondering about all the pesticides used and good knows what the animals we eat having been eating.
Cheap certainly isn't best, there should be a decent standard for everyone that fits within both a lifestyle and budget that the average can afford, capitalism does drive innovation but rarely the interests of everyone and it is regulation that should attempt to address the balance rather than simply giving the people cheap stuff/services.BarelySentientAI said:BarelySentientAI said:
And secondly, which might translate into this discussion, because why should one party pay for upgrades that anybody can later use.
https://bills.parliament.uk/bills/3569
Easier to copy & paste
A Bill to require providers of electronic communications networks to grant other such providers access to their apparatus where that is necessary to ensure consistent network coverage; to prevent those providers from charging more than the standard market rate for such access; to require the regulator to impose penalties on providers who unreasonably fail to grant such access; to make provision for the purpose of incentivising providers to allow customers of other providers to use their networks where access cannot be granted to their apparatus; and for connected purpose
There could be a debate about whether such requirements hinder investment in building infrastructure which is where regulation should step in to ensure the cost of not doing so outweighs the cost of doing so.
The word "should" is an ethics debate really but the answer some may have is because the advancement of our society (I'll use that word too) "should" be there for the benefit of all rather than the few.
Either the government itself carries out such advancement or it imposes regulation on a private sector to balance profit against the interests of the people.
When you look at the state of the water companies it seems to suggest some of these regulators are useless, whether Ofgem is working in the right direction or not I guess could be another 10 page thread
The case of the electricity system is one end user paying for something that another end user does not need to pay for, solely due to the timing of when each party has the requirement. Not a profit thing, not an advancement of society thing, not a relative merits of each's ability to pay thing, entirely timing.
"You were the individual customer that caused the upgrade, so you pay for it all and everyone else can then benefit for free".
I'm quite confident that even the outlier voices on this issue don't want standing charges to go that way - cuts for all apart from a massive uplift to be paid by the third person in the street to get an EV or the seventh person to fit solar panels.
Our village didn't have mobile signal so EE built a phone tower now we have phone signal if you go with EE, the bill proposes that despite EE paying out for the tower Vodaphone and the rest should also have access. That's not implying Mr Smith should pay for the tower because he complained about the lack of signal.
In the game of chess you can never let your adversary see your pieces1 -
EssexHebridean said:Generally speaking, the infrastructure to the property is pretty similar regardless of occupancy. My incoming gas pipe is no smaller than the gas pipe serving the house of the family of 5 along the road, and no larger than the single lady opposite. Similarly on the electricity side, meters these days are largely the same regardless of home size they are installed in.
The pipe going into the house is probably one of the cheaper and easier aspects of the system, when these threads talk about access to the supply I think that's more to do with the vastly complex network that we don't really see or think off in day to day life
Each domestic property uses (from a design and capacity perspective) the same amount of that high pressure main, essentially because of the point EH made.
The same in the electricity network.
Capacity is as (if not more) important to infrastructure design that overall usage.BarelySentientAI said:
Part of the problem with the regulators is that people misunderstand their role. They are not there to make everything as cheap as possible for customers focusing only on the immediate term. Your paraphrase is pretty accurate - to balance profit against the interests of the customers - or perhaps to balance the long term needs of the customers against the immediate costs. We already have problems with short term thinking then requiring urgent and expensive actions, I wouldn't want to make it worse by turning the regulator into a customer advocacy group.
I don't think the average reasonable person would see these industries as acting in the interests of the majority.BarelySentientAI said:
I accept your point that a plausible outcome would be for everything to be funded by central government - but the same argument could be made for almost any expenditure and it's not necessarily a good thing.
Micro plastics are everywhere but farmers are still covering fields in sheets of plastic to ensure early growth of their crops with those plastics at best not being recycled and at worst breaking down into the soil that is growing the food we eat, that's without wondering about all the pesticides used and good knows what the animals we eat having been eating.
Cheap certainly isn't best, there should be a decent standard for everyone that fits within both a lifestyle and budget that the average can afford, capitalism does drive innovation but rarely the interests of everyone and it is regulation that should attempt to address the balance rather than simply giving the people cheap stuff/services.
I disagree that the energy system should be funded by central government. Even the infrastructure part.BarelySentientAI said:BarelySentientAI said:
And secondly, which might translate into this discussion, because why should one party pay for upgrades that anybody can later use.
https://bills.parliament.uk/bills/3569
Easier to copy & paste
A Bill to require providers of electronic communications networks to grant other such providers access to their apparatus where that is necessary to ensure consistent network coverage; to prevent those providers from charging more than the standard market rate for such access; to require the regulator to impose penalties on providers who unreasonably fail to grant such access; to make provision for the purpose of incentivising providers to allow customers of other providers to use their networks where access cannot be granted to their apparatus; and for connected purpose
There could be a debate about whether such requirements hinder investment in building infrastructure which is where regulation should step in to ensure the cost of not doing so outweighs the cost of doing so.
The word "should" is an ethics debate really but the answer some may have is because the advancement of our society (I'll use that word too) "should" be there for the benefit of all rather than the few.
Either the government itself carries out such advancement or it imposes regulation on a private sector to balance profit against the interests of the people.
When you look at the state of the water companies it seems to suggest some of these regulators are useless, whether Ofgem is working in the right direction or not I guess could be another 10 page thread
The case of the electricity system is one end user paying for something that another end user does not need to pay for, solely due to the timing of when each party has the requirement. Not a profit thing, not an advancement of society thing, not a relative merits of each's ability to pay thing, entirely timing.
"You were the individual customer that caused the upgrade, so you pay for it all and everyone else can then benefit for free".
I'm quite confident that even the outlier voices on this issue don't want standing charges to go that way - cuts for all apart from a massive uplift to be paid by the third person in the street to get an EV or the seventh person to fit solar panels.
Our village didn't have mobile signal so EE built a phone tower now we have phone signal if you go with EE, the bill proposes that despite EE paying out for the tower Vodaphone and the rest should also have access. That's not implying Mr Smith should pay for the tower because he complained about the lack of signal.
Mr Smith wanted EE, others didn't, so it's all on him to pay. Mr Jones doesn't use much energy, but Mr Bloggs does, so Mr Bloggs should pay Mr Jones' part of the standing charge (either directly or hidden in unit rates).
1 -
BarelySentientAI said:EssexHebridean said:Generally speaking, the infrastructure to the property is pretty similar regardless of occupancy. My incoming gas pipe is no smaller than the gas pipe serving the house of the family of 5 along the road, and no larger than the single lady opposite. Similarly on the electricity side, meters these days are largely the same regardless of home size they are installed in.
The pipe going into the house is probably one of the cheaper and easier aspects of the system, when these threads talk about access to the supply I think that's more to do with the vastly complex network that we don't really see or think off in day to day life
Each domestic property uses (from a design and capacity perspective) the same amount of that high pressure main, essentially because of the point EH made.
The same in the electricity network.
Capacity is as (if not more) important to infrastructure design that overall usage.BarelySentientAI said:
Part of the problem with the regulators is that people misunderstand their role. They are not there to make everything as cheap as possible for customers focusing only on the immediate term. Your paraphrase is pretty accurate - to balance profit against the interests of the customers - or perhaps to balance the long term needs of the customers against the immediate costs. We already have problems with short term thinking then requiring urgent and expensive actions, I wouldn't want to make it worse by turning the regulator into a customer advocacy group.
I don't think the average reasonable person would see these industries as acting in the interests of the majority.BarelySentientAI said:
I accept your point that a plausible outcome would be for everything to be funded by central government - but the same argument could be made for almost any expenditure and it's not necessarily a good thing.
Micro plastics are everywhere but farmers are still covering fields in sheets of plastic to ensure early growth of their crops with those plastics at best not being recycled and at worst breaking down into the soil that is growing the food we eat, that's without wondering about all the pesticides used and good knows what the animals we eat having been eating.
Cheap certainly isn't best, there should be a decent standard for everyone that fits within both a lifestyle and budget that the average can afford, capitalism does drive innovation but rarely the interests of everyone and it is regulation that should attempt to address the balance rather than simply giving the people cheap stuff/services.
I disagree that the energy system should be funded by central government. Even the infrastructure part.BarelySentientAI said:BarelySentientAI said:
And secondly, which might translate into this discussion, because why should one party pay for upgrades that anybody can later use.
https://bills.parliament.uk/bills/3569
Easier to copy & paste
A Bill to require providers of electronic communications networks to grant other such providers access to their apparatus where that is necessary to ensure consistent network coverage; to prevent those providers from charging more than the standard market rate for such access; to require the regulator to impose penalties on providers who unreasonably fail to grant such access; to make provision for the purpose of incentivising providers to allow customers of other providers to use their networks where access cannot be granted to their apparatus; and for connected purpose
There could be a debate about whether such requirements hinder investment in building infrastructure which is where regulation should step in to ensure the cost of not doing so outweighs the cost of doing so.
The word "should" is an ethics debate really but the answer some may have is because the advancement of our society (I'll use that word too) "should" be there for the benefit of all rather than the few.
Either the government itself carries out such advancement or it imposes regulation on a private sector to balance profit against the interests of the people.
When you look at the state of the water companies it seems to suggest some of these regulators are useless, whether Ofgem is working in the right direction or not I guess could be another 10 page thread
The case of the electricity system is one end user paying for something that another end user does not need to pay for, solely due to the timing of when each party has the requirement. Not a profit thing, not an advancement of society thing, not a relative merits of each's ability to pay thing, entirely timing.
"You were the individual customer that caused the upgrade, so you pay for it all and everyone else can then benefit for free".
I'm quite confident that even the outlier voices on this issue don't want standing charges to go that way - cuts for all apart from a massive uplift to be paid by the third person in the street to get an EV or the seventh person to fit solar panels.
Our village didn't have mobile signal so EE built a phone tower now we have phone signal if you go with EE, the bill proposes that despite EE paying out for the tower Vodaphone and the rest should also have access. That's not implying Mr Smith should pay for the tower because he complained about the lack of signal.
Mr Smith wanted EE, others didn't, so it's all on him to pay. Mr Jones doesn't use much energy, but Mr Bloggs does, so Mr Bloggs should pay Mr Jones' part of the standing charge (either directly or hidden in unit rates).🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her4 -
prowla said:BarelySentientAI said:prowla said:BarelySentientAI said:bristolleedsfan said:MattMattMattUK said:The issue with Standing Charges comes up and again and again and it largely splits into two camps.
First there are those who understand the system, that there are fixed costs maintaining a network and a connection to a dwelling and think that it is fair to apportion that to individual bills, so that people pay for their connection and the energy they use.
Then there is the second group, who think that "someone else" should pay for their grid connection.
I am in the first group, because I am rational sensible and not selfish, as are many of the more learned members of this forum. Those who are reactionary and selfish normally fall into the second group, generally make a lot of noise and generally lack understanding.
Biggest single reason for current level of electricity standing charges at least for my region - costs shift from unit rate to SC that I think took effect from April 2022
Taken from scot_39 post on previous page
"But that was based in some part if not all on careful reflection in their view of actual costs / numbers - TCR (2019) - before crisis. OFGEM essentially decided low users were underpaying for the fixed component of infrastructure and high users were paying too much"
It's a view I suppose.
So if pointed means "based on the statistical analyses carried out to determine the relative merits of the two scenarios", then yes.prowla said:
Even if you do accept it as a necessary, one of its stated elements is for "Maintaining the energy supply network that delivers gas and electricity to your home"; looking at that, the cost is not the same per household. - The idea that it costs the same to provide the infra for each house is flawed, because the infra has to be sized to suit the workload. - Therefore a house with multiple residents and high(er) use takes more of the capacity than a single occupancy house with frugal use. - Therefore making the same standing charge means that the low use customer is subsidising the infrastructure requirements to provide the service to the high-use household.prowla said:
Another element of the standing charge is to cover "Visiting homes to take meter readings". - But if a person has a smart meter then there is no need for visiting to take meter readings.prowla said:
Therefore, the assertion that the standing charge means that everybody pays a "fair share" is based on unfair assumptions and so cannot be a "fair share". The term "fair share" is basically baloney and is mostly used two somehow bolster an opinion and attribute it some sense of righteousness which it doesn't merit..2 -
BarelySentientAI said:I don't think the average reasonable person has any understanding of how the electricity network does or should work, or what works might or might not be necessary. The average person sees a big number of pounds and panics despite not having the knowledge to determine whether that is an appropriate reaction.BarelySentientAI said:
I disagree that the energy system should be funded by central government. Even the infrastructure part.BarelySentientAI said:But the "heavy users should pay all the standing charge" arguments want essentially that.
Mr Smith wanted EE, others didn't, so it's all on him to pay. Mr Jones doesn't use much energy, but Mr Bloggs does, so Mr Bloggs should pay Mr Jones' part of the standing charge (either directly or hidden in unit rates).In the game of chess you can never let your adversary see your pieces0 -
BarelySentientAI said:I don't think the average reasonable person has any understanding of how the electricity network does or should work, or what works might or might not be necessary. The average person sees a big number of pounds and panics despite not having the knowledge to determine whether that is an appropriate reaction.BarelySentientAI said:
I disagree that the energy system should be funded by central government. Even the infrastructure part.BarelySentientAI said:But the "heavy users should pay all the standing charge" arguments want essentially that.
Mr Smith wanted EE, others didn't, so it's all on him to pay. Mr Jones doesn't use much energy, but Mr Bloggs does, so Mr Bloggs should pay Mr Jones' part of the standing charge (either directly or hidden in unit rates).
It's difficult to educate on the complexities of the system when it's much easier to write shouty headlines.3 -
MattMattMattUK said:They throw around various discredited figures about who low users are, usually claiming that they are poor and/or pensioners, where as those groups tend to be average users or above, with low users generally being second homes/holiday homes and those with solar and battery installations.
0 -
BarelySentientAI said:I don't think the average reasonable person has any understanding of how the electricity network does or should work, or what works might or might not be necessary. The average person sees a big number of pounds and panics despite not having the knowledge to determine whether that is an appropriate reaction.
I don't think the current system of government should, I think in an ideal world however they should and that's would people should be questioning rather than arguing amongst themselves.BarelySentientAI said:
I disagree that the energy system should be funded by central government. Even the infrastructure part.BarelySentientAI said:But the "heavy users should pay all the standing charge" arguments want essentially that.
Mr Smith wanted EE, others didn't, so it's all on him to pay. Mr Jones doesn't use much energy, but Mr Bloggs does, so Mr Bloggs should pay Mr Jones' part of the standing charge (either directly or hidden in unit rates).1 -
BarelySentientAI said:there are also connection costs to be accounted for in the initial building of the infrastructure (which very few private individuals ever need to pay).BarelySentientAI said:Business tariffs are very different from residential tariffs,BarelySentientAI said:
It's difficult to educate on the complexities of the system when it's much easier to write shouty headlines.In the game of chess you can never let your adversary see your pieces0 -
Chris_b2z said:MattMattMattUK said:They throw around various discredited figures about who low users are, usually claiming that they are poor and/or pensioners, where as those groups tend to be average users or above, with low users generally being second homes/holiday homes and those with solar and battery installations.
https://www.ofgem.gov.uk/sites/default/files/2024-02/Ofgem_archetypes_update_2024_FinalReport_v4.1.3.pdf
1
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