MSE News: More energy deals with NO standing charges finally on the cards

Scot_39

The_Green_Hornet said:

https://www.gov.uk/government/publications/national-insurance-fund-accounts/great-britain-national-insurance-fund-account-for

The National Insurance Fund (NIF) holds National Insurance Contributions (NICs), paid by employees, employers, and the self-employed. Voluntary contributions are also paid into the Fund. Receipts paid into the NIF are kept separate from all other revenue raised by national taxes and are used to pay social security benefits such as contributory benefits and the State Pension.

Can you fix the link 

EssexHebridean

Suspect the end of the link was missing 

https://www.gov.uk/government/publications/national-insurance-fund-accounts/great-britain-national-insurance-fund-account-for-the-year-ended-31-march-2024

alh1

I'd rather be a PYG customer for my energy and water usage.
 At the moment I am literally "trapped" with my heating and hot water provider. I can not switch because they appear to have a "monopoly" on the new build development I live on. My most recent bill (received yesterday) was a total of £177.31 for 3 months. I used £30.87 of heating and hot water.  My daily standing charge is £1.50 per day! Totalling £138.00, the rest is VAT.
I am also a low water user, again, my latest bill (for 6 months) was for £91.65, I only used £21.92....
How can this be right? No one seems to want to take this up on behalf of people like me who, pay more for the privilege of having a service connected, than my personal usage?

Chrysalis

MattMattMattUK said:

QrizB said:

Ofgem set the rules. It sounds as though they might change them.

If they change the rules re. how the cap is implemented, or how suppliers are charged for their customers, suppliers will be able to offer zero standing charge tariffs.

I think what is going to be interesting is that the supplier, at least from what we know so far, will be required to hand over the same amount for network upkeep, social policy etc. per customer that currently comes from standing charges, so I am not sure that a tariff that is just a flat conversion of the price cap will work, because there will be a bunch of properties that do not use energy for days, weeks or even months at a time and use very little when they do. 

The reality is that standing charges were and are the fairest, most rational way to attribute the fixed costs to customers and because Ofgem have listened to the whingers they are likely going to end up creating a subsidy from normal users to those on the zero standing charge tariff. 

Its going to be a bit messy, as you say, all these things will still apply.  There is an unknown here, how many people will take up the option.
Of course you know I disagree on the SC fairness argument, currently only a small portion of the SC is for fixed network costs, and a per household collection distorts the burden on different individuals.  High income and multi adult households benefit from it, low income singletons suffer from it.  It also reduces encouragement to reduce energy usage as a bigger portion of the bill is fixed cost. (we disagree on this but right now there's no need for you to reply to me, we've already agreed to disagree on this point so let's not get distracted by endlessly debating it here)
So the crunch is now both options will be available, and I expect there will be adjustments over time as they they get it right.

quartzz

dealyboy said:

MattMattMattUK said:

It is interesting that some suppliers have been offering tariffs with reduced SCs and higher prices recently. Mine, E.ON Next, offered a 40% reduction on the electricity SC and I switched to this tariff. It will make only a small difference to my costs with my current usage pattern but will encourage me to be more efficient.

My region is Eastern and the standing charge came down from 51.26p per day to 31.92p which is probably sufficient to cover the costs to which MMMUK referred.

I'm just gonna jump into this thread here... and say, the 47p standing charge from British Gas is what swung me to this tarriff (elec only)

mmmmikey

Chrysalis said:

MattMattMattUK said:

QrizB said:

Ofgem set the rules. It sounds as though they might change them.

If they change the rules re. how the cap is implemented, or how suppliers are charged for their customers, suppliers will be able to offer zero standing charge tariffs.

I think what is going to be interesting is that the supplier, at least from what we know so far, will be required to hand over the same amount for network upkeep, social policy etc. per customer that currently comes from standing charges, so I am not sure that a tariff that is just a flat conversion of the price cap will work, because there will be a bunch of properties that do not use energy for days, weeks or even months at a time and use very little when they do. 

The reality is that standing charges were and are the fairest, most rational way to attribute the fixed costs to customers and because Ofgem have listened to the whingers they are likely going to end up creating a subsidy from normal users to those on the zero standing charge tariff. 

Its going to be a bit messy, as you say, all these things will still apply.  There is an unknown here, how many people will take up the option.
Of course you know I disagree on the SC fairness argument, currently only a small portion of the SC is for fixed network costs, and a per household collection distorts the burden on different individuals.  High income and multi adult households benefit from it, low income singletons suffer from it.  It also reduces encouragement to reduce energy usage as a bigger portion of the bill is fixed cost. (we disagree on this but right now there's no need for you to reply to me, we've already agreed to disagree on this point so let's not get distracted by endlessly debating it here)
So the crunch is now both options will be available, and I expect there will be adjustments over time as they they get it right.

As you say, fairness is a subjective concept. We could go round forever debating that.

However this is presented if this goes ahead for every £1 that one low use customer saves, a high user customer will pay £1 more. An average customer will be no worse off. One concern I have is that some folks might be supporting this idea without realising that they're actually likely to be worse off.  I hope I'm wrong but I suspect that expectations have been set unreallistically and this will all end in tears.

I'm also wondering how this proposal would work for someone like me who has electric heating and solar panels so is a very low user in the summer and a high user in winter. Will we need to swap tariffs twice a year? Also, what would happen to smart tariffs such as those from Octopus? I'm really struggling to see how this could be made to work in practice - messy is possibly something of an understatement......

bristolleedsfan

mmmmikey said:

Chrysalis said:

MattMattMattUK said:

QrizB said:

Ofgem set the rules. It sounds as though they might change them.

If they change the rules re. how the cap is implemented, or how suppliers are charged for their customers, suppliers will be able to offer zero standing charge tariffs.

I think what is going to be interesting is that the supplier, at least from what we know so far, will be required to hand over the same amount for network upkeep, social policy etc. per customer that currently comes from standing charges, so I am not sure that a tariff that is just a flat conversion of the price cap will work, because there will be a bunch of properties that do not use energy for days, weeks or even months at a time and use very little when they do. 

The reality is that standing charges were and are the fairest, most rational way to attribute the fixed costs to customers and because Ofgem have listened to the whingers they are likely going to end up creating a subsidy from normal users to those on the zero standing charge tariff. 

Its going to be a bit messy, as you say, all these things will still apply.  There is an unknown here, how many people will take up the option.
Of course you know I disagree on the SC fairness argument, currently only a small portion of the SC is for fixed network costs, and a per household collection distorts the burden on different individuals.  High income and multi adult households benefit from it, low income singletons suffer from it.  It also reduces encouragement to reduce energy usage as a bigger portion of the bill is fixed cost. (we disagree on this but right now there's no need for you to reply to me, we've already agreed to disagree on this point so let's not get distracted by endlessly debating it here)
So the crunch is now both options will be available, and I expect there will be adjustments over time as they they get it right.

Also, what would happen to smart tariffs such as those from Octopus? I'm really struggling to see how this could be made to work in practice - messy is possibly something of an understatement......

Taken from 3rd paragraph of linked MSE article from O/P -

 "could give energy bill-payers the option to go onto a new version of the Energy Price Cap with no standing charges but higher unit rates. This would benefit lower users"

Smart Tariffs are not price cap tariff. suppliers can set SC and U/R how they want to.

MattMattMattUK

mmmmikey said:

Chrysalis said:

MattMattMattUK said:

QrizB said:

Ofgem set the rules. It sounds as though they might change them.

If they change the rules re. how the cap is implemented, or how suppliers are charged for their customers, suppliers will be able to offer zero standing charge tariffs.

I think what is going to be interesting is that the supplier, at least from what we know so far, will be required to hand over the same amount for network upkeep, social policy etc. per customer that currently comes from standing charges, so I am not sure that a tariff that is just a flat conversion of the price cap will work, because there will be a bunch of properties that do not use energy for days, weeks or even months at a time and use very little when they do. 

The reality is that standing charges were and are the fairest, most rational way to attribute the fixed costs to customers and because Ofgem have listened to the whingers they are likely going to end up creating a subsidy from normal users to those on the zero standing charge tariff. 

Its going to be a bit messy, as you say, all these things will still apply.  There is an unknown here, how many people will take up the option.
Of course you know I disagree on the SC fairness argument, currently only a small portion of the SC is for fixed network costs, and a per household collection distorts the burden on different individuals.  High income and multi adult households benefit from it, low income singletons suffer from it.  It also reduces encouragement to reduce energy usage as a bigger portion of the bill is fixed cost. (we disagree on this but right now there's no need for you to reply to me, we've already agreed to disagree on this point so let's not get distracted by endlessly debating it here)
So the crunch is now both options will be available, and I expect there will be adjustments over time as they they get it right.

As you say, fairness is a subjective concept. We could go round forever debating that.

I tend to agree, however it is interesting to note that those generally throwing around the "unfairness" of standing charges are simultaneously demanding that someone else subsidises them, that would seem to be to be the very opposite of fair, no matter how subjective one's interpretation.

mmmmikey said:

However this is presented if this goes ahead for every £1 that one low use customer saves, a high user customer will pay £1 more. An average customer will be no worse off. One concern I have is that some folks might be supporting this idea without realising that they're actually likely to be worse off.  I hope I'm wrong but I suspect that expectations have been set unreallistically and this will all end in tears.

From the rough figures that have been thrown about it is not just the high users that will pay, but in fact everyone other than ultra low users, so even below average users will need to pay more to subsidise those with second homes, holiday homes, solar and battery installations etc.

mmmmikey said:

I'm also wondering how this proposal would work for someone like me who has electric heating and solar panels so is a very low user in the summer and a high user in winter. Will we need to swap tariffs twice a year? Also, what would happen to smart tariffs such as those from Octopus? I'm really struggling to see how this could be made to work in practice - messy is possibly something of an understatement......

Until we see the split it would be hard to know based on the summer and winter usage, however when talked about before it seemed that abolishing standing charges would only benefit ultra low users, in terms of those with normal domestic usage but generation from solar it would potentially only benefit those with batteries, but until we see the specifics of whatever pandering to the shouty people Ofgem comes up with we will not know for sure.

Qyburn

mmmmikey said:

I'm also wondering how this proposal would work for someone like me who has electric heating and solar panels so is a very low user in the summer and a high user in winter. Will we need to swap tariffs twice a year? 

You wouldn't need to of course, but if these are going to be price cap compliant variable tariffs then I don't see why you wouldn't be allowed to.

As I've said before the industry and regulators should be assuming that everyone will pick the option that's best for them personally. So the zero SC option will only be taken by users below the break even threshold, meaning that as a group their increased unit rates won't compensate for the loss of the standing charge. Meanwhile high users will take the SC and lower rates, they'll then be paying their share of the SC cost as before.

So supplier costs are unchanged, half their user base will be paying less, the other half paying the same. The only possible outcome is for prices to rise overall. 

Scot_39

alh1 said:

I'd rather be a PYG customer for my energy and water usage.
 At the moment I am literally "trapped" with my heating and hot water provider. I can not switch because they appear to have a "monopoly" on the new build development I live on. My most recent bill (received yesterday) was a total of £177.31 for 3 months. I used £30.87 of heating and hot water.  My daily standing charge is £1.50 per day! Totalling £138.00, the rest is VAT.
I am also a low water user, again, my latest bill (for 6 months) was for £91.65, I only used £21.92....
How can this be right? No one seems to want to take this up on behalf of people like me who, pay more for the privilege of having a service connected, than my personal usage?

Getting a bit off topic here - but given the thrust in part here is the £1.50 per day

Where if anywhere has Ofgem got on it's review of "block" / "wholesale" supplies to domestic property - and the talk of protections from them on it ?