OFGEM Consultation zero standing.charges

NotArobot24

Sadly I struggled to respond to this consultation as it was disability unfriendly, someone told me that there was an email but it has closed anyway.

Am I right in thinking that if such a scheme were brought in they would just increase the energy rates which would create some arbitrary limit after which one would be worse off, so we would need a break even analysis to see if we were better off.

Such a rate would seem to help people in flats rather than houses.

Was there a great thread on MSE covering the pros and cons of this?

Forgive me for not using search but I have visual impairment and struggle when there are too many posts.

Is the answer a social tariff for those of us on the heap?

ButterCheese

Last thing I heard, they were pushing for suppliers to offer at least one tariff with lower standing charges.  And Martin Lewis said this was not going far enough.    I doubt anyone would be better off anyway.  The energy companies will find a way to not lose much money whilst making everyone else pay more.  For example (this is purely a guess and not based on any current knowledge or data):

tariff 1: lower standing charge, higher per kw/h rates, even higher rates for peak useage.

tariff 2, 3: higher standing charge than before, same per kw/h rates as before so it looks like they are "lower" but are in fact the same, but your overall bill is higher if you use the same as you always did.

Outcome:  Ofgen say they've done a brilliant job in forcing an optional lower tariff, but this tariff would not benefit 90% of people who would opt for it.  Government then gets heat for not stepping in enough, so they make the lowest tariff available to certain vulnerable groups who meet the criteria (UC, disability benefit, middle name of Clive, born before 1847).

NotArobot24

ButterCheese said:

Last thing I heard, they were pushing for suppliers to offer at least one tariff with lower standing charges.  And Martin Lewis said this was not going far enough.    I doubt anyone would be better off anyway.  The energy companies will find a way to not lose much money whilst making everyone else pay more.  For example (this is purely a guess and not based on any current knowledge or data):

tariff 1: lower standing charge, higher per kw/h rates, even higher rates for peak useage.

tariff 2, 3: higher standing charge than before, same per kw/h rates as before so it looks like they are "lower" but are in fact the same, but your overall bill is higher if you use the same as you always did.

Outcome:  Ofgen say they've done a brilliant job in forcing an optional lower tariff, but this tariff would not benefit 90% of people who would opt for it.  Government then gets heat for not stepping in enough, so they make the lowest tariff available to certain vulnerable groups who meet the criteria (UC, disability benefit, middle name of Clive, born before 1847).

That is so true.

Scot_39

NotArobot24 said:

Sadly I struggled to respond to this consultation as it was disability unfriendly, someone told me that there was an email but it has closed anyway.

Am I right in thinking that if such a scheme were brought in they would just increase the energy rates which would create some arbitrary limit after which one would be worse off, so we would need a break even analysis to see if we were better off.

Such a rate would seem to help people in flats rather than houses.

Was there a great thread on MSE covering the pros and cons of this?

Forgive me for not using search but I have visual impairment and struggle when there are too many posts.

Is the answer a social tariff for those of us on the heap?

6 million homes will seen get the £150 WHD - after the system was expanded to 2.7m more homes.

Thats about as close to a social tariff as has yet been announced.

But the budget at end of the month may - as just one of the many rumours circuliating - announce other shifts in billing and green levies - that might give some some relief.

Qyburn

NotArobot24 said:

Am I right in thinking that if such a scheme were brought in they would just increase the energy rates which would create some arbitrary limit after which one would be worse off, so we would need a break even analysis to see if we were better off.

That's pretty much it. Apart from the wider effect, there will be a bunch of customers who choose the tariff because they will be better off. Suppliers will therefore get less from those customers, while incurring the same costs. Prices for everyone else will therefore need to rise.

Qyburn

NotArobot24 said:

Is the answer a social tariff for those of us on the heap?

Answer to what?

Personally I don't agree with the idea of a social tariff. If there are people so badly off they can't live comfortably then that should be addressed by benefits, minimum wage, education etc. Not by arbitrarily picking one thing to subsidise.