Standing Charges: Gas & Electricity

Baldeagle095

I struggle to think of another product or service where your bill is itemised and split between fixed (standing) cost and variable cost.
When you fill your car up at a supermarket, you are not asked to pay a portion for the installation of the forecourt. Similarly in a supermarket you are not asked to pay for the erection and overheads of the supermarket. It is all included in the variable cost of the goods you purchase.  Simply the more you buy,the more you pay - in direct proportion.
There is a high correlation between income and energy usage.
You should pay for it in the same manner as most other good or services you receive I.e pro rata

GingerTim

Baldeagle095 said:

I struggle to think of another product or service where your bill is itemised and split between fixed (standing) cost and variable cost.
When you fill your car up at a supermarket, you are not asked to pay a portion for the installation of the forecourt. Similarly in a supermarket you are not asked to pay for the erection and overheads of the supermarket. It is all included in the variable cost of the goods you purchase.  Simply the more you buy,the more you pay - in direct proportion.
There is a high correlation between income and energy usage.
You should pay for it in the same manner as most other good or services you receive I.e pro rata

Not sure the supermarket comaprison holds, unless they pipe goods into your home at the flick of a switch.

Baldeagle095

I have yet to hear a rational argument for not implementing variable cost.

Desmond_Hume

Baldeagle095 said:

I struggle to think of another product or service where your bill is itemised and split between fixed (standing) cost and variable cost.
When you fill your car up at a supermarket, you are not asked to pay a portion for the installation of the forecourt. Similarly in a supermarket you are not asked to pay for the erection and overheads of the supermarket. It is all included in the variable cost of the goods you purchase.  Simply the more you buy,the more you pay - in direct proportion.
There is a high correlation between income and energy usage.
You should pay for it in the same manner as most other good or services you receive I.e pro rata

Public services.  I pay council tax, which is used to fund many things. Schools, leisure facilities, waste collection.  That’s the fixed infrastructure costs paid for. School trip for my daughter? Extra. Swim at the local pool? Extra. Bus journey? Extra. 

GingerTim

Baldeagle095 said:

I have yet to hear a rational argument for not implementing variable cost.

It will hurt those on low incomes, who use more energy through not fault of their own - pensioners and the disabled at home more during the day, the chronically and terminally ill who need heat and to power electronic equipment, and anyone stuck in some of Britain's terrible housing stock who can't afford to upgrade insulation/can't upgrade because they rent. The correlation between high usage and income is not simple.

I've yet to hear about convincing argument for your suggested approach. It sounds so simple, but the more you look at it the worse it looks. The current approach to standing charges is the least worst, in my view.

masonic

Baldeagle095 said:

I struggle to think of another product or service where your bill is itemised and split between fixed (standing) cost and variable cost.

Water bills have a similar arrangement.

Telephone services have a service fee (which often includes bundled calls, but you don't pay nothing if you use nothing) and there are usually chargeable services added on if you use them.

ISPs charge a service charge and for the most part data is unlimited.

Landlords normally charge a fixed rent regardless of how much time you spend in the property.

Taxis will start the meter at a fixed fee, with it incrementing based on distance travelled.

You generally see a split between fixed and variable when there is a fixed element and a consumption-based element to the services.

matelodave

Why do you think it costs less to pipe gas, electricity or water to your house than it does for the bloke next door or for that matter to send his bill or repair the infrastructure when it goes down at 3am in the morning.

If it really concerns you that much then disconnect yourself from the grid, get solar panels , a wind turbine and batteries to ensure that you have a continuous supply, (even when its dark, snows or the wind doesn't blow) and use LPG for your cooking and heating.

Problem solved, no standing charges but dont forget that you have pick up the maintenance charges for your own system and the cost of delivery for the LPG.

Not forgetting the water collection system or well that you need for water and your own sewerage treatment facilities (not forgetting that you'll need to have it pumped out occasionally)

debitcardmayhem

Baldeagle095 said:

I struggle to think of another product or service where your bill is itemised and split between fixed (standing) cost and variable cost.
When you fill your car up at a supermarket, you are not asked to pay a portion for the installation of the forecourt. Similarly in a supermarket you are not asked to pay for the erection and overheads of the supermarket. It is all included in the variable cost of the goods you purchase.  Simply the more you buy,the more you pay - in direct proportion.
There is a high correlation between income and energy usage.
You should pay for it in the same manner as most other good or services you receive I.e pro rata

Petrol stations, supermarkets etc don’t have their profits capped though do they. Energy companies don’t set service charges , OFGEM sets them.
But lets say Mr make it fair , (i.e. better for me) will be happy to pay say 5 times more than Mr average (who lives 500 miles closer to the generator than the Fair family). No I didn’t think so.

Dewpoint

According to the recent Ofgem feedback,  it looks like most people agree that the standing charges should be abolished.

Let's hope Ofgem actually pull their finger out and abolish them rather than continually reverting to another flipping review!

https://www.ofgem.gov.uk/call-for-input/standing-charges-domestic-retail-options

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

booneruk

Dewpoint said:

According to the recent Ofgem feedback,  it looks like most people agree that the standing charges should be abolished.

This means nothing and should be ignored as far as I'm concerned. The reality of things shouldn't be trumped by howls from the "as long as someone else pays I'm fine" brigade.