Standing Charges: Gas & Electricity

MattMattMattUK

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.

They are, they standing charge is the fixed cost and the usage is the variable cost. Those who want the standing charge rolled into the unit rate are demanding that average and high users subsidise low users.

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

Well yes, because the alternative is "someone else" pays, a subsidy, which is inherently unfair.

QrizB

Here's one of the threads from last time ML got involved:

https://forums.moneysavingexpert.com/discussion/6457615/martin-lewis-why-are-energy-standing-charges-so-high-what-can-be-done

There's 38 pages there and I don't see any benefit in going over it all again.

But if you think the standing charges for energy are high, you should consider the costs of generating your own electricity or switcnhing to bottled gas. Mains supplies seem a bargain by comparison.

Dewpoint

While I accept the infrastructure for gas and electricity has to be maintained, to me it seems fairer that should be recovered from a percentage of the usage costs generated by each household. So the more a household uses the infrastructure the more they pay ie. maintence charges should be built into the unit costs.

 

MeteredOut

Dewpoint said:

While I accept the infrastructure for gas and electricity has to be maintained, to me it seems fairer that should be recovered from a percentage of the usage costs generated by each household. So the more a household uses the infrastructure the more they pay ie. maintence charges should be built into the unit costs.

 

This argument has been done to death on the other thread linked to above (I'd recommend perusing it). Someone who uses double the electricity or gas than you is not putting twice the load onto the network.

Its understandable you want others to pay more and you pay less because you're fortunate enough to have a well insulated house, but it really is insulting others intelligence to try to claim that is based on the desire for fairness.

As a pensioner, you are more likely to use NHS services that someone in their mid-twenties. Should the tax on your pension increase to reflect any use?

debitcardmayhem

Dewpoint said:

While I accept the infrastructure for gas and electricity has to be maintained, to me it seems fairer that should be recovered from a percentage of the usage costs generated by each household. So the more a household uses the infrastructure the more they pay ie. maintence charges should be built into the unit costs.

 

Ok my definition of fair then is the DNO takes 1 hour to clear a power cut the 9 people who pay for 10 kWh / day get back on immediately, but mr Fair at number 11 only pays for 1 kWh / day so he can wait for 9 hours to be reconnected, works for me.

pseudodox

My summer gas usage is always outweighed by the standing charge but I can put the heating on at the flick of a switch.  I don't have to go out and forage for kindling and then rub 2 sticks together to light a fire.

Should people who drive lower mileage pay less for their motoring running costs apart from petrol?  Special discounted prices for a car purchase?  Half price MOTs?  Cheaper repairs?  Cheaper breakdown cover? Lower insurance?  My car costs me £££ to have standing around most of the time, but it is there to use 24/7/365 at the drop of a hat.

Should I pay less council tax because I don't have children using schools and because I put my bins out maybe once a month?  Rarely go out after dark so I don't need street lighting.

Perhaps people could opt for half price Standing Charges but then have their access to gas and electric supply turned off for 12 hours every day or for a set 6 months of the year.

GingerTim

Dewpoint said:

While I accept the infrastructure for gas and electricity has to be maintained, to me it seems fairer that should be recovered from a percentage of the usage costs generated by each household. So the more a household uses the infrastructure the more they pay ie. maintence charges should be built into the unit costs.

 

You seem to be labouring under the misapprehension that someone using 15kwh a day is 'using more infrastructure' than someone who uses 3kwh a day. It doesn't work like that.

Dewpoint

Don't agree, and it's not a misapprehension. It's an opinion. Like any infrastructure, the more you use it the more you should pay seems to me the fairest solution.

GingerTim

Dewpoint said:

Don't agree, and it's not a misapprehension. It's an opinion. Like any infrastructure, the more you use it the more you should pay seems to me the fairest solution.

It's an opinion, sure, to which you are more than entitled. But it's also factually wrong leading to your incorrect premise about 'fairness'.

Scot_39

Dewpoint said:

Don't agree, and it's not a misapprehension. It's an opinion. Like any infrastructure, the more you use it the more you should pay seems to me the fairest solution.

And we all in fact already do just that - of the just over £400 inc VAT - of network costs built into the current cap - only around half of that is added to standing charges.

The other half - you guessed it - goes on the unit costs.

It doesnt matter whether you use 1kWh or 10kWh electric or 1 m3 or 10 m3 a day - you need the pylons, local wires and pipes.

[If anything - the infrastructure is arguably designed to cope / limited by peak instantaneous power demand - kW / MW demands - or more strictly kVA / MVA - for electric - and peak volume or strictly even peak gas flow in m3/sec if you like) - which is why in France - their SC is banded by kVA on many electric tariffs. And unit rates flat. ]

Your supplier needs buildings, computers and staff.

As well as some components of green levies and social policy costs.

That is what the standing charge pays for.

You might yet be given the opportunity of a zero SC tariff - but many who do not choose wisely - are likely to end up paying more to offset those who pay less than their fixed costs.

Which is why Ofgem were  - in round 2 consultation - was going to leave existing cap model in place - and limit access to zero SC - for the vulnerable who might end up paying far far more - to save a few a fraction of a few £100 pounds.

At cap TDCV - duel  fuel SC represent just over 15% of the bill - 1/6 th - it doesnt take a very big rise in unit rates - to wipe those savings out.