Martin Lewis: Standing charges update risks households paying more

Scot_39

Chrysalis said:

My issue with the SC is that its not what I think it should be which is to pay for fixed costs on the infrastructure.  

It pays for more than just the infrastructure / network if thats what you mean by that - see table 2.1 in Ofgem report linked in my above post.

Chrysalis said:

Ofgem playing games with it for favourable political headlines.

But of course I am grounded and obviously if charges are removed from the SC, then the unit rate goes up as a consequence, its not free money.  Just a different spread of where the charges fall.

Yes I must admit I have concerns over the recent drops in my SC given the changes to the caps - last 2 caps about 10p/day in total - with very small savings on the unit rates - relatively speaking when overall cap fell again in Jluy.  Especially as my unit rates went up in Apr with the bigger of the 2 drops in SC.

Date   PC2 Cap   Diff    My S/C       Diff     Unit Rate (Peak)   Diff

Jan     1150                  56.58p                     30.11 p/kWh

Apr     1201       £51     49.09p      -7.49p     32.17 p/kWh      2.16p/kWh

Jul      1145       £-56    46.28p      -3.81p     30.95 p/kWh      -1.28p/kWh

of diff from Jan to July

                          £-5                      -10.3p                               +0.84p

Which looks more than a little suspicious like moving the underlying balance somewhat, given how close Jan and July total cap prices were pa.

- £5 over 3900 kWh =  -0.13p if taken purely on unit rates.  

So if chose to spin it - it could look for me on my rates like they might have moved nearly a penny back into unit rates to pay for the SC drop.  (0.84+0.13=0.97p / kWh x 3900 =£37.83 /365 = 10.36p per day).

gundog7

I think that Octopus are subsidising their alternative energy production infrastructure (electricity) by a wickedly high standing charge, e.g., last month we paid just £27.04 for our electricity, yet we paid £18.32 on top of that for the standing charge, plus of course VAT on top of that again.  Phil G

debitcardmayhem

gundog7 said:

I think that Octopus are subsidising their alternative energy production infrastructure (electricity) by a wickedly high standing charge, e.g., last month we paid just £27.04 for our electricity, yet we paid £18.32 on top of that for the standing charge, plus of course VAT on top of that again.  Phil G

Which region are you in ? 
If Mersey then see what OFGEM says , if you are that is lower than the price cap, and you can’t blame Octopus for being cheaper.
https://www.ofgem.gov.uk/get-energy-price-cap-standing-charges-and-unit-rates-region

Scot_39

gundog7 said:

I think that Octopus are subsidising their alternative energy production infrastructure (electricity) by a wickedly high standing charge, e.g., last month we paid just £27.04 for our electricity, yet we paid £18.32 on top of that for the standing charge, plus of course VAT on top of that again.  Phil G

Except the standing charge doesn't just get paid to or if you prefer strictly get retained by Octopus.

They collect it on behalf of grid operators and of course govt policy charges.

It went up for SoLR, as SoLR dropped out it was increased to cover fixed network costs - as of July 24 cap over half - £121 ex vat of £219 inc vat average electricity sc was for fixed network costs.

That and other levies, policy costs and of course the vat on them.

Only a fraction was for operating costs £62 ex vat and margins in £219 - so still less than third.

From figure 2.1 of 

https://consult.ofgem.gov.uk/energy-supply/standing-charges-domestic-retail-options/supporting_documents/standing_charges_domestic_retail_options.pdf

And that was forecast to increase by Ofgem as £10s bn pa spent on new grid infrastructure / renewables connections.

But  then perversely mines has dropped c10.3p since Jan to July.  - The new lower split ? - But my unit rates have gone up nearly a penny since January despite my all electric pc2 regional cap being back down just below Jan levels.

So would have to check all regions data - but just in mine - could say looks arguably suspiciously like they might be reversing their TCR decisions - dare I speculate - for political reasons. Due largely to low users complaining about paying their fair share based on TCR analysis.

born_again

Perhaps ML could persuade the Gov, or do it himself, not like he's short of a few £££
To set up a co that provides a SC free only energy co. 
Would be interesting to see how it stacks up against other tariffs.

wrf12345

"Perhaps ML could persuade the Gov, or do it himself, not like he's short of a few £££
To set up a co that provides a SC free only energy co. 
Would be interesting to see how it stacks up against other tariffs."

Ebico used to do this, it would be a move forward if Ofgem allowed companies to offer this without any other tariffs, as currently they are supposed to default to the capped tariff. If the zero s/c tariffs come with ridiculously high unit rates they will be self-defeating as only those ultra low users will bother with them, rather than everyone up to the famed average user. Ofgem has been cutting the s/c for most users (about twenty percent in my case) without companies going bust. Zero s/c tariffs with around ten percent increase in unit rates as the default tariff would be a good starting point, high users are very profitable for companies and there would be a lot of competition for them on other tariffs for those companies who wanted to offer more than the default tariff.

WiserMiser

wrf12345 said:

Ebico used to do this, it would be a move forward if Ofgem allowed companies to offer this without any other tariffs,

IIRC Ofgem states there must be a standing charge, but it can be 0p.

Such a tariff will be attractive to people with very low usage, e.g. second homers, speculators with empty flats in tower blocks, lock-up garages etc.  Many such users won't be poor, and most will be loss making for the supplier.  If the supplier can't subsidise this tariff with conventional ones (which will have to be more expensive than the competition) then they won't survive.

Unfortunately there's no getting away from this, you and Martin are mistaken, no matter how long you keep looking, there's simply no crock of gold at the end of the rainbow.