Energy standing Charges - OFGEM's inability to address unfair standing charges on consumers

born_again

matt_drummer said:

I have been thinking about this a bit and I dare say that there's quite a lot wrong with my conclusion but I'll give it a go anyway!

Maybe we shouldn't have standing charges.

Our energy requirements have been privatised.

Why not just let the suppliers get on it with it? Market forces will win out in the end?

All of the trouble seems to come from the idea of putting a cap on what energy companies can charge.

That is cake and eat it for the consumer to some extent, we want the protection of never having to pay more than a regulated amount but don't want to pay the costs.

Maybe let businesses sort it out?

Standing charges will go which should make many people happy.

But ying and yang, all the protection will go too.

You can't have it all.

Which supplier's are you talking about?

Given that we do not pay the national grid direct, unlike some countries, as well as the supplier to the house.

Perhaps that is the way forward, no standing charge.
Either we all pay NG direct, or I would prefer that it comes out of Government coffers.

molerat

coupleuk said:

dunstonh said:

Here we go again....

 The disproportionate standing charges applied to my and energy bill is a typical example.

How is it disproportionate to you and say the neighbour on your right, or your left or across the road from you? 
Does the infrastructure to supply energy cost less to your house than your neighbours?

It is disproportionate if my neighbour can get a standing charge of 40p (Tomato Energy) or 0p (Utilita) when I am paying 65p with Octopus.

Aren't we all using the "same infrastructure"? The Standing Charge should go into the Unit Rate - those using more energy are (possibly) putting more stress on the infrastructure anyway.

Move to one of those suppliers then.  The standing charge is still there on a per customer basis and has to be forwarded on, none of the suppliers pocket much of it.  Outside of the standard variable it is down to the individual supplier how they apportion that charge and recover it from their customers.

TheBanker

coupleuk said:

dunstonh said:

Here we go again....

 The disproportionate standing charges applied to my and energy bill is a typical example.

How is it disproportionate to you and say the neighbour on your right, or your left or across the road from you? 
Does the infrastructure to supply energy cost less to your house than your neighbours?

It is disproportionate if my neighbour can get a standing charge of 40p (Tomato Energy) or 0p (Utilita) when I am paying 65p with Octopus.

Aren't we all using the "same infrastructure"? The Standing Charge should go into the Unit Rate - those using more energy are (possibly) putting more stress on the infrastructure anyway.

As someone said - if I buy a steak from ASDA they don't charge me their supply costs separately - a store located next to the abattoir isn't going to be cheaper than one 200 miles away.

And, while we're on the subject - the same argument applies to a litre of fuel and Vehicle Excide Duty - a HUGE department of Government could be closed in an instant.

There is a difference. ASDA decide where to locate their stores, and if one isn't making a profit they have the option to close it down. The energy networks don't have that option. If there is a village where the residents don't use enough energy to cover the cost of their infrastructure, the electricity distributor cannot simply decide to disconnect the village from their network. 

Qyburn

coupleuk said:

It is disproportionate if my neighbour can get a standing charge of 40p (Tomato Energy) or 0p (Utilita) when I am paying 65p with Octopus.

Why aren't those tariffs available to you? You should be asking Tomato and Utilita.

BarelySentientAI

coupleuk said:

dunstonh said:

Here we go again....

 The disproportionate standing charges applied to my and energy bill is a typical example.

How is it disproportionate to you and say the neighbour on your right, or your left or across the road from you? 
Does the infrastructure to supply energy cost less to your house than your neighbours?

Aren't we all using the "same infrastructure"? The Standing Charge should go into the Unit Rate - those using more energy are (possibly) putting more stress on the infrastructure anyway.
.

Given that your assumption here is incorrect, that doesn't look good for the rest of your argument.

coupleuk said:

dunstonh said:

Here we go again....

 The disproportionate standing charges applied to my and energy bill is a typical example.

How is it disproportionate to you and say the neighbour on your right, or your left or across the road from you? 
Does the infrastructure to supply energy cost less to your house than your neighbours?

It is disproportionate if my neighbour can get a standing charge of 40p (Tomato Energy) or 0p (Utilita) when I am paying 65p with Octopus.

Companies choose to charge in a different pattern despite having to pay the same thing to the network in the background is not a good argument for mandating a specific way of charging.

You are asking for the opposite of competition and choice.  Are you sure that's what you want?  Everyone should be forced to do everything exactly the same way?

Surely if the most important thing to you is zero standing charge, and anything else is completely unfair, then you switched to utilita as soon as you discovered that tariff?

No?

Oh.

coupleuk

born_again said:

I suggest you follow the link this this post & contact them direct with the options.

https://forums.moneysavingexpert.com/discussion/comment/80953097/#Comment_80953097

As to the rest, this has been done to the death many times. Posting here will not help, only going direct to the horses mouth stands any chance.

Unfortunately, if you look at their proposals, they suggest lowering the Standing Charge and putting some of it onto the Unit Rates

They are trying to do it so nobody really benefits from lower usage and nobody really suffers either - so why bother to change it at all.

They also use the current (obscenely high) Standing Charge as their point of reference (POR) - when we know it has been set artificially high to recoup debt from failed suppliers. 

That debt wont be here forever so a REALISTIC Standing Charge should be used as their POR.

Using Ofgem Rates from October, the following Rates could be used;

Standing Charges = NIL 
Electric = 35p per Unit Charged
Gas = 5.9p per Unit Charged

Again using Ofgem Official Usage Figures it would show;

A Low User of Gas & Electricity = Better Off by £111.70 per Year

A Medium User = Worse Off by just £4.43 per Year

A High User = Worse Off by £184 per Year

An electric-only user in a 2-Bed on Economy 7 = Better Off by £67 per Year

The above would encourage High Users to cut back where possible.

It really isn't difficult to work out IF you actually want to change the current system - which (sadly) is not in Ofgems interests to do.

coupleuk

I haven't "picked a number" - I've used OFFICIAL Ofgem Figures.

Then, I entered probably 100 different price combinations to finally reach a combined income which would closely align to Industry Income (again using Ofgem figures).

The Unit Rate figures I have suggested are the closest to both the Official User data and the Official Income data.

I look forward to your own research - or is it just easier to sit in the armchair and moan

BarelySentientAI

coupleuk said:

I haven't "picked a number" - I've used OFFICIAL Ofgem Figures.

Then, I entered probably 100 different price combinations to finally reach a combined income which would closely align to Industry Income (again using Ofgem figures).

The Unit Rate figures I have suggested are the closest to both the Official User data and the Official Income data.

I look forward to your own research - or is it just easier to sit in the armchair and moan

You started from a premise that zero standing charge is correct, and then looked at what would happen purely from the perspective of usage.  All whilst deciding that the number you decided to choose was the sole "realistic" option.

Hardly a comprehensive analysis, but useful to justify your initial premise.

Also, the standing charge is not supposed to be a mechanism to "encourage High Users to cut back where possible".

coupleuk

Oh bless you.

Given that the whole thread is titled "energy-standing-charges-ofgems-inability-to-address-unfair-standing-charges-on-consumers" it is not unrealistic that the discussion includes the removal of standing charges.

But, as offered in my last post - if you have an alternatively researched argument then let's hear it

BarelySentientAI

Well aware of the thread title.  I'm afraid my education must have missed that "address" and "eliminate" were synonyms.