Standing Charges: Gas & Electricity

Dewpoint

I'm a pensioner living in a well-insulated flat and I try to minimise my impact on the environment by using as little water, electricity, and gas as I can.

My actual usage for all these is low, but the bills I pay don't reflect this because the standing charges for G & E represent between 30% and 50% of the total.

It seems to me I'm subsidising those who are not as careful. They pay the same standing charges as me, but it represents a far smaller proportion of the Bill.

Not fair in my opinion. I think standing charges should be scrapped, and those who use the most should pay the most in direct proportion.

twopenny

Well I'd be happy with that 
My standing charge for electricity is higher than my usage. Which is really annoying.

QrizB

There's a longstanding tension on this board between those who want "someone else" to pay for the fixed costs of having an energy supply, and those who think everyone should pay their own way.

Ofgem recently published a study looking into it, and it identified all the same problems that forum regulars had; namely that the fixed costs still needed to be paid and that all you did was move the costs around.

There is currently one supplier - Utilita - which has a "no standing charge" tariff. They instead have a much higher cost for the first two units used each day. If you think this would benefit you, yt and look into switching to Utilita.

Baldeagle095

I tend to agree. I am currently on BG Fixed Lighter 12M v3 tariff which expires in May. The standing charges are quite low:- 10.502 ppd gas & 40.02 ppd electric.
However I will have to move to a tariff where the standing charges are higher. 
There was me thinking that standing charges were being reduced. Obviously not.
I would check with Cheap Energy Club to see if you can get a better deal when contract is due to expire.

Effician

2 of us here both retired & electric SC is 40% of our bill ( electric only plus log burner) but unlike you we consider it good value for money,  we can use as much or as little as we like when we like  & it's always available, a small price to pay for upkeep of the grid + other associated costs for the convenience it affords.

masonic

Energy supply involves both fixed costs (such as maintenance of the infrastructure) and variable costs (such as the wholesale cost and cost of transmission), so it isn't unreasonable for someone with an active supply to pay some fixed costs regardless of their use.

There are arguments in favour of these costs being divided up in proportion to fuel use as an incentive for people to reduce usage, but this would represent a cross-subsidisation from heavy users to light users. Some heavy users have medical needs or a disability that prevents them from cutting back, so there would then need to be a rather complex system of financial support to see that these users are not harmed.

If you wanted to go further, there could be much greater push to variable unit pricing to incentivise people to use less according to supply and demand, with flat rate tariffs priced to discourage their use. But this would open an even bigger can of worms regarding fairness, with those unable to get a working smart meter potentially losing out.

Supposedly there will be movement on standing charges later this year, perhaps in time for the winter months when it will probably matter least!

Dewpoint

QrizB said:

There's a longstanding tension on this board between those who want "someone else" to pay for the fixed costs of having an energy supply, and those who think everyone should pay their own way.

Ofgem recently published a study looking into it, and it identified all the same problems that forum regulars had; namely that the fixed costs still needed to be paid and that all you did was move the costs around.

There is currently one supplier - Utilita - which has a "no standing charge" tariff. They instead have a much higher cost for the first two units used each day. If you think this would benefit you, yt and look into switching to Utilita.

Yes, I appreciate this is a contentious issue, and that the maintenance of the infrastructure has to be paid for. But to me, it seems the fairest way for anyone using any resource is for those who use the most pay the most in direct proportion to their usage.

As for Utilita, that seems to me just hiding the standing charge inside another.

QrizB

Here's the ongoing Ofgem review:

https://www.ofgem.gov.uk/publications/standing-charges-update-our-review

It illustrates the problems that need to be considered.

Effician

Dewpoint said:

QrizB said:

There's a longstanding tension on this board between those who want "someone else" to pay for the fixed costs of having an energy supply, and those who think everyone should pay their own way.

Ofgem recently published a study looking into it, and it identified all the same problems that forum regulars had; namely that the fixed costs still needed to be paid and that all you did was move the costs around.

There is currently one supplier - Utilita - which has a "no standing charge" tariff. They instead have a much higher cost for the first two units used each day. If you think this would benefit you, yt and look into switching to Utilita.

Yes, I appreciate this is a contentious issue, and that the maintenance of the infrastructure has to be paid for. But to me, it seems the fairest way for anyone using any resource is for those who use the most pay the most in direct proportion to their usage.

Like the NHS maybe?

debitcardmayhem

Dewpoint said:

QrizB said:

There's a longstanding tension on this board between those who want "someone else" to pay for the fixed costs of having an energy supply, and those who think everyone should pay their own way.

Ofgem recently published a study looking into it, and it identified all the same problems that forum regulars had; namely that the fixed costs still needed to be paid and that all you did was move the costs around.

There is currently one supplier - Utilita - which has a "no standing charge" tariff. They instead have a much higher cost for the first two units used each day. If you think this would benefit you, yt and look into switching to Utilita.

Yes, I appreciate this is a contentious issue, and that the maintenance of the infrastructure has to be paid for. But to me, it seems the fairest way for anyone using any resource is for those who use the most pay the most in direct proportion to their usage.

As for Utilita, that seems to me just hiding the standing charge inside another.

Ok what about those “living” with a terminal illness that try to keep their house at a constant 22° that involves a lot of energy, do you think that they should pay more so those with good health who can cut down on their usage pay less per kWh? Does being in good health mean you don’t use energy or do you have wireless electricity and gas which doesn’t come down pipes and wires.
Where does your definition of fair stop.

GingerTim

debitcardmayhem said:

Dewpoint said:

QrizB said:

There's a longstanding tension on this board between those who want "someone else" to pay for the fixed costs of having an energy supply, and those who think everyone should pay their own way.

Ofgem recently published a study looking into it, and it identified all the same problems that forum regulars had; namely that the fixed costs still needed to be paid and that all you did was move the costs around.

There is currently one supplier - Utilita - which has a "no standing charge" tariff. They instead have a much higher cost for the first two units used each day. If you think this would benefit you, yt and look into switching to Utilita.

Yes, I appreciate this is a contentious issue, and that the maintenance of the infrastructure has to be paid for. But to me, it seems the fairest way for anyone using any resource is for those who use the most pay the most in direct proportion to their usage.

As for Utilita, that seems to me just hiding the standing charge inside another.

Ok what about those “living” with a terminal illness that try to keep their house at a constant 22° that involves a lot of energy, do you think that they should pay more so those with good health who can cut down on their usage pay less per kWh? Does being in good health mean you don’t use energy or do you have wireless electricity and gas which doesn’t come down pipes and wires.
Where does your definition of fair stop.

Usually when the above arguments are made 'fair = I should pay less'.

Not much thought for, as you say, the terminally I'll, but also the chronically ill, the disabled, the elderly who are more likely to be at home during the day day, the less well off who are stuck renting poor housing stock and can't do anything about insulation etc, all of whom who use more energy through no fault of their own.