Question: Standing Charge Abolish & Fixed Term Energy Contracts

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82186258#Comment_82186258

As someone with storage heaters, I'll definitely be protesting if the electric SC goes.

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/comment/82186263#Comment_82186263

It is nothing to do with "dragging it out" or any of the other conspiracy rubbish you usually spout. The government's target is the next fiscal year, it will likely align with the first cap change in the new fiscal year. Standard period to evaluate, treasury sign off on the policy elements etc.

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82185736#Comment_82185736

I agree. As someone in a detached bungalow in the West Mids, my annual usage used to be 10k+ to heat the whole house to a comfortable level throughout. I now only heat the living room to the maximum my 3.4kw storage heater will do and maintain the rest of the house around 10-14C with the rest on low or off (with 80% used at off peak) and I still can't get my annual usage below 5500 kWh.

Oscarmax

I will be approximately £100 worse off after the SC, the lower end user will be better off. As regards electric SC it is what it is, life to short to worry over things you have no control over.

Grumpy_chap

standing charges were supposed to cover the infrastructure costs: these are huge, and National Grid is spending £ Billions installing mega cables and Pylons to cater for massive increases in need for electricity -

The gas standing charge doesn't fund cables and pylons.

bristolleedsfan

Taken from O/P "Martin was campaigning for REDUCTION of standing charges, but be careful what you wish for"

"Mr Lewis has long argued that the system unfairly penalises people who use less gas, including those trying to keep their bills down"

Announcing the news, he said: “I have confirmation that the standing charge on gas bills is to be scrapped in 2027. I've been campaigning on this for about six years, so I am very pleased to hear it.”

Section62

Also, standing charges were supposed to cover the infrastructure costs:

Maybe in theory, but the reality is different.

….these are huge, and National Grid is spending £ Billions installing mega cables and Pylons to cater for massive increases in need for electricity - did I hear anyone say Data Centres?

Which (albeit you're now talking about electricity not gas) highlights the flaw in the 'standing charge=infrastructure' argument.

The network/infrastructure costs are not fixed. If people use more gas then the supply and distribution network capacity needs to be enhanced, and doing so is expensive. Some of the infrastructure costs can be avoided (or reduced) if people use less. So one way of avoiding spending £ Billions on new gas infrastructure (including storage) - which may only have a limited useful life - is to employ a pricing mechanism to get people to use less gas instead. Which could include charging a higher rate at times of peak demand.

Loading infrastructure costs onto a standing charge doesn't achieve that. There is a weaker incentive to reduce household gas consumption when a substantial proportion of the cost has to be paid regardless of how much you use, or when you use it.

There are some people who will find their bills going up - but the answer isn't to stick with a broken charging model.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/82186236#Comment_82186236

if 60% saved an average of £45 - guess what that means the 40% pay an average of £68 (*) extra.

And based on past Ofgem analysis some very very much more - £100s maybe £1000s particularly if they do fully extend to electric.

(*) 0.6*-£45/0.4 = + £67.50 to balance the books without more govt cash injection

Burnham et al I suspect are gambling their core vote is in the 60% - but could be mistaken in a significant number of cases.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/82186430#Comment_82186430

As another forumite put it so succintly many many months and threads ago - when suggested the current biasing of charges was unfair to those with electric heating - and I am paraphrasing - but essentially saying

"there are no votes in increasing the price of gas"

Seems some in WM now disagree for many

Section62

https://forums.moneysavingexpert.com/discussion/comment/82186797#Comment_82186797

"there are no votes in increasing the price of gas"

Hence a strategy of reducing the cost of gas for those who use less. Someone has probably done the calculus to reassure them that lost votes will be at least balanced by votes gained, if necessary perhaps helped by spinning those with higher consumption as 'gas guzzlers' refusing to adopt modern and less polluting methods of heating and/or better insulation.

The lack of truth, or unduly simplistic approach contained in that shouldn't be a bar to it being deployed. It has, after all, been tried and tested with ICE vehicles.