BG, EDF, Eon & Octopus to offer lower standing charge option - DON'T GET TOO EXCITED!

gpman

Martin Lewis has previously claimed Ofgem's promised lower standing charge tariff option from January this year has suffered a death by a 1000 cuts. He now thinks it may not happen at all, or if it does, "not enough people will switch and they'll say, 'it wasn't worth it'."
https://www.moneysavingexpert.com/news/2026/01/standing-charge-tariff-delay/

Well we can now call that 1001 cuts!

It was announced today on the MLMS that BG, EDF, Eon & Octopus have agreed to do a trial starting April to offer a tariff with lower standing charges.
Great I thought.
Those suppliers probably have about 25 million residential customers in total
But then it was let slip that only 150,000 customers can take part in the trial.

I've been looking for more details, and I have only found this so far from Eon:

https://news.eonenergy.com/news/e-on-next-to-offer-lower-standing-charge-tariff

So it seems it will be by invitation only, and I already get the feeling Eon are hoping this trial will fail.

"A previous E.ON Next trial, carried out in 2024, highlighted the importance for a customer to pay attention to the tariff they are on to understand whether they could be paying less.

The trial found that 64% of customers who took part were high consumption customers, who could have been paying less on another fixed product with a higher standing charge. Nine in ten (90%) of these customers chose to remain on the lower standing charge tariff, despite being told they could be paying less."

Oh, and just to make sure, Eon will restrict those they select to take part to only those with a smart meter!

michaels

Can those of us who care what we pay for our gas and electricity have lower prices paid for by those who are worse off on a low standing charge tariff but chose it anyway?

Qyburn

Oh, and just to make sure, Eon will restrict those they select to take part to only those with a smart meter!

Quite right too.

gpman

What we are doing to help customers

We are introducing a lower standing charge tariff pilot which will start in April and last one year. The trial will give customers more choice, especially those who use less energy.

Customers who are with EDF, E.ON, Octopus and British Gas will be offered the new tariff if they meet the requirements.

Source: Changes to energy price cap between 1 April and 30 June 2026 | Ofgem

Scot_39

See Ofgem info on trial - updated today

https://www.ofgem.gov.uk/policy/lower-standing-charge-tariffs-next-steps

and note the "save £150" which is about half the current average regional duel fuel SC.

And also note the other trial on peak use vs standard charge. Maybe a hint to the French system of charges varying with kVA caps to come.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/81898348#Comment_81898348

Wrong.

it doesnt cost anymore to supply non smart meter property - and the biggest chunk of tge electric SC is network costs - and older meters actually cost less as last longer.

But mihgt cost less to operate - network costs inc DCC, Arqiva and cellular licenses etc vs meter reader visits.

and what about those with non communicating smart meters - over 10% according to mse - through no fault of their own ?

Even many a smart meter installed recently - even maybe just in last year - will need a new 4g comms hub by 2033 - another say £100+ fitter visit - many old meters lasted 4 or 5 times as long (35-40 years) without need for tinkering.

gpman

Just to clarify, I don't see there is any technical reason why a supplier needs a customer to have a smart meter to offer a low standing charge tariff. It was a decision made by Eon. We'll have to see if the other 3 suppliers apply a similar restriction.

So presumably, Eon won't care whether the smart mater is communicating, just that the customer has a smart meter installed.

EssexHebridean

I don't think there is a technical reason, but it does allow a supplier to get a better grasp on how a consumer uses energy I suppose - so with a relatively small scale trial, that may be their thinking. Regardless, for the vast majority of households there is now no good reason to not have a new up to date meter installed, so it doesn't particularly carry any negatives as far as I can see. (And if it does rely on a fully functioning meter, then so much the better as it should be a further incentive for suppliers to get those that aren't working sorted out, particularly where customers may be considered vulnerable.)

The small trial with selected individuals does at least suggest that there is an understanding that this is going to need to be handled with more nuance than just letting customers who "think" they will save fire ahead and choose the new tariffs.

gpman

https://forums.moneysavingexpert.com/discussion/comment/81898829#Comment_81898829

So you do not think it maybe has anything to do with Eon facing possible financial penalties for not hitting their SM installation targets?

Nor do you see any good reason to not throw out otherwise good working order, traditional meters which were probably made entirely within Europe, if not the UK, and presumably sending them to landfill in the UK, whilst we are all paying for the supply & installation of replacement Chinese (either manufactured in, or which use a vast amount of components manufactured in) gadgets that typically have a much more limited lifespan?

Don't forget, there may also be some consumers who are just happier to pay for what they use. i.e the more they use the correspondingly more they pay, just like most commodities, even if it does cost them more. Remember, Eon themselves said in regards to the earlier trial:

"Nine in ten (90%) of these customers [64%] chose to remain on the lower standing charge tariff, despite being told they could be paying less."

But it doesn't seem like Eon are too keen to report back that nuanced possibility.

Suppliers prefer standing charges because it helps stabilise their revenue to fund their fixed price elements of supply. Perhaps Waterstones will soon be introducing a £5 pcm charge to all their customers?

EssexHebridean

I didn't comment at all on that possibility gpman - it could be, but based on the information in the thread at least there doesn't seem to be anything to confirm, or deny that, does there.

As for "throwing out otherwise good working order" etc - increasingly the older style meters are now approaching end of life in any event. Particularly where they only have a handful of years still to go, and once those that actually ARE past their certified lifespan have been replaced, no, I don't see any issue with moving things on faster. Plenty of folk have already had non end of life meters replaced with more modern versions in any event, simply because they wanted the advantages of the more advanced technology.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/81898829#Comment_81898829

yes if read tbe actual Ofgem post they are capping to review.

But the EOn comment that 64% paid more on a previous low SC deal is interesting - despite them being told there was a cheaper tariff option majority stuck on it.

And until i read todays Ofgem update on the proposed trials - I hadnt caught from reading posts here about the SC vs peak demand study - that could of course need 1/2 hourly smart data or perhaps smart meters just report daily max.

I just hope Ofgrm add sone protectiin to all electric homes - my small 2 bed has 3 nsh, 1 gravity fed hw tank immersion element and 9kW shower - just those can pull combined 19kWh - in the higher ranges of French charges iirc. - if go that route