Standing Charges: Gas & Electricity

Scot_39

Ofgem got c30000 responses.

That's assuming all were pro the change - they weren't.

30000 out of 29 million homes.

0.1%

Time UK policy wasn't determined by vocal minorities.

Ofgems stage 2 proposal was roundly attacked by many of the energy / poverty campaigners / charities who championed the idea initially.

They wanted reduced bills not shuffling from one line to another.

Especially when that been shown repeatedly in both Ofgem stages to hurt the very people they were campaigning to help.

Scot_39

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

But there are millions of exceptions.

Like the over 1m homes who had 5-15k to invest in solar and battery arrays.

Or the elderly and disabled - millions of them - who have no choice but to heat or suffer and in limit even die of cold related complications - inc strokes, heart attacks.

And many of them would use more if could.

And higher unit rates - as Ofgem has repeatedly shown - would see many suffer disproportionately under zero SC tariffs.

Qyburn

Dewpoint said:

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

Most of those probably thinking removing the standing charge would be just that, remove the SC with no other balancing price increase elsewhere. We've seen posts on here from people thinking that, some expressing full confidence that suppliers would be able to absorb the loss from their profits.

mmmmikey

Another thread on standing charges. I wonder if we'll reach a point of consensus this time?

wrf12345

Falling electric and gas prices make for the ideal moment to abolish standing charges, unit rate will still go down but not as much as if the s/c remained. Once that has settled down, forced efficiencies by lowering the difference between wholesale and retail prices (currently a multiple of 2.2-2.5) will help keep the unit rate down. AI driven systems that constantly monitor and reset/repair smart meters, as well as dealing with payments, may eventually pare down retail energy companies, even further narrowing the gap between retail and wholesale prices.

GingerTim

wrf12345 said:

Falling electric and gas prices make for the ideal moment to abolish standing charges, unit rate will still go down but not as much as if the s/c remained. Once that has settled down, forced efficiencies by lowering the difference between wholesale and retail prices (currently a multiple of 2.2-2.5) will help keep the unit rate down. AI driven systems that constantly monitor and reset/repair smart meters, as well as dealing with payments, may eventually pare down retail energy companies, even further narrowing the gap between retail and wholesale prices.

Sir, this is the energy forum, not the science fiction forum.

debitcardmayhem

wrf12345 said:

Falling electric and gas prices make for the ideal moment to abolish standing charges, unit rate will still go down but not as much as if the s/c remained. Once that has settled down, forced efficiencies by lowering the difference between wholesale and retail prices (currently a multiple of 2.2-2.5) will help keep the unit rate down. AI driven systems that constantly monitor and reset/repair smart meters, as well as dealing with payments, may eventually pare down retail energy companies, even further narrowing the gap between retail and wholesale prices.

Really, AI carp filling you with false dawns. Still doesn’t make it better for those who have to use energy , mind you they don’t use as much as AI does

debitcardmayhem

mmmmikey said:

Another thread on standing charges. I wonder if we'll reach a point of consensus this time?

Not until we have free energy mikey, and then I’m not sure

Gerry1

Dewpoint said:

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

To (mis)quote Mandy Rice-Davies, 'Well they would, wouldn't they?'. The same people might well agree that our Trident submarines should be scrapped so that the government could give everyone a free trip to Walt Disney World every year...

Scot_39

debitcardmayhem said:

wrf12345 said:

Falling electric and gas prices make for the ideal moment to abolish standing charges, unit rate will still go down but not as much as if the s/c remained. Once that has settled down, forced efficiencies by lowering the difference between wholesale and retail prices (currently a multiple of 2.2-2.5) will help keep the unit rate down. AI driven systems that constantly monitor and reset/repair smart meters, as well as dealing with payments, may eventually pare down retail energy companies, even further narrowing the gap between retail and wholesale prices.

Really, AI carp filling you with false dawns. Still doesn’t make it better for those who have to use energy , mind you they don’t use as much as AI does

Sadly in the real world network costs are increasing.

Constraint - demand and grid thermal (transmission) limits - payments to renewables growing exponentially.  Over £1bn last year, nearly 4x 2-3 years before. Thermal alone - £3bn by 2030.

£10s bn - upto £77bn in next 5 years NESO combined from NG SPEN and SSEN figures.  And that's just grid.

And as Ofgem made clear in Feb Mar 2nd stage consultation  - forecast to increase as a proportion of total cost.

So hiding a bigger share of cost - fixed cost if that is fixed - in unit pricing only makes the system less fair - not fairer.


The whole SC is the least of the potential beneficial/ or nasties - heading some of our way 

Half hourly settlement, regional pricing, scrapping the current bid model (simplistically the highest bid wins other generators win we lose)  etc etc are potentially far more significant changes to argue / support / worry about for many users.