Standing Charges

Gazbo92

Hi All,
I have tried in vain, to get a response from my MP, Ofgem, and others in answer to my question. 
The question is, Who police's where the standing charges are spent? I have researched where the money is supposed to go, but have no answer to who police's this.  My suspicion is that it goes in profits to the greedy energy companies! 

MattMattMattUK

Gazbo92 said:

Hi All,
I have tried in vain, to get a response from my MP, Ofgem, and others in answer to my question. 
The question is, Who police's where the standing charges are spent? I have researched where the money is supposed to go, but have no answer to who police's this.  My suspicion is that it goes in profits to the greedy energy companies! 

Search standing charges on here and read the many hundreds of threads. 

Google Ofgem and see how standing charges actually work (note, specifically Ofgem, not some random conspiracy theorist on YouTube/Faceache).

the_lunatic_is_in_my_head

Gazbo92 said:

  My suspicion is that it goes in profits to the greedy energy companies! 

Money goes to the energy companies, around half is for some of their running costs, the rest is various things broken down in the pie chart here:

https://blog.moneysavingexpert.com/2023/07/martin-lewis--why-are-energy-standing-charges-so-high--what-can-/

It's somewhat of myth that your standing charge is going on something specific, the energy company gets it and the cap is designed to cover their costs with a certain profit element included. 

The big profit in energy is made by the extraction companies on a global scale, sadly that's very unlikely to change until fossil fuels run out. 

Many threads on here to read:

https://forums.moneysavingexpert.com/discussion/6549602/energy-standing-charges-ofgems-inability-to-address-unfair-standing-charges-on-consumers

Gerry1

Hmmm... should newbies now expect to be 'welcomed' by brickbats?

Edit:  A couple of posts have since been deleted.

EssexHebridean

The key thing here is that the standing charge doesn't go in "profits" to anyone, in the way you mean. The energy suppliers are currently capped on the profit they are allowed to make in any event - 1.9%, I think?

Think about it like this - you go out to work, get paid, and pay your essential bills. After those are paid, you are not allowed to retain any more than 1.9% of your income as discretionary spending money. Would retaining that 1.9% make you "greedy"? I suspect you won't think so! 

Scot_39

Perhaps mse could reinstate tge SC sticky post at top of forum ???

EssexHebridean

@MSE_James - I think it may have been you who originally instigated the Standing charges explainer sticky a while ago when we had a lot of these sorts of questions. Any chance of digging it out of the virtual filing cabinet and re-stickying it? 

wrf12345

retail energy companies roughly buy electric at 10p and sell it to us for 25p per unit, the more money they waste the bigger their actual profit at 2 percent overall and huge sums disappear in running things like offshore call-centres and executives salaries/bonuses so whilst the bottom line profit is small percentage-wise it does not mean there isn't a lot of (our!) dosh sloshing around the system. If you ask Ofgem about the absurdly high s/c's they will refer you to the government and if you ask your MP he will tell you it is down to Ofgem. The energy minister, who could change things, seems to be asleep, dreaming of the wonders of carbon capture (which probably costs more than the s/c's bring in and could certainly be better spent on winter fuel allowances for pensioners).

mmmmikey

wrf12345 said:

retail energy companies roughly buy electric at 10p and sell it to us for 25p per unit, the more money they waste the bigger their actual profit at 2 percent overall and huge sums disappear in running things like offshore call-centres and executives salaries/bonuses so whilst the bottom line profit is small percentage-wise it does not mean there isn't a lot of (our!) dosh sloshing around the system. If you ask Ofgem about the absurdly high s/c's they will refer you to the government and if you ask your MP he will tell you it is down to Ofgem. The energy minister, who could change things, seems to be asleep, dreaming of the wonders of carbon capture (which probably costs more than the s/c's bring in and could certainly be better spent on winter fuel allowances for pensioners).

But other than that you're basically happy?

Qyburn

wrf12345 said:

retail energy companies roughly buy electric at 10p and sell it to us for 25p per unit, the more money they waste the bigger their actual profit at 2 percent overall and huge sums disappear in running things like offshore call-centres and executives salaries/bonuses so whilst the bottom line profit is small percentage-wise it does not mean there isn't a lot of (our!) dosh sloshing around the system. If you ask Ofgem about the absurdly high s/c's they will refer you to the government and if you ask your MP he will tell you it is down to Ofgem. The energy minister, who could change things, seems to be asleep, dreaming of the wonders of carbon capture (which probably costs more than the s/c's bring in and could certainly be better spent on winter fuel allowances for pensioners).

This is what competition is all about. If you truly believe what you claim then there's nothing stopping you starting up as a supplier yourself without the waste and greed that you claim exists within other suppliers. Then you can set your prices well below the competition, and clean up.