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  • FIRST POST
    • SteveJB58
    • By SteveJB58 8th Feb 19, 11:14 AM
    • 2Posts
    • 0Thanks
    SteveJB58
    Standing Charge Abuse
    • #1
    • 8th Feb 19, 11:14 AM
    Standing Charge Abuse 8th Feb 19 at 11:14 AM
    Having just looked at the tariffs on offer from E-On, I am very angry to see them using the standing charge as a means of generating extra money. Given the standing charge is SUPPOSED to cover the overheads of getting the gas to your house, why is it different for each tariff? To give one example: gas SC on standard tariff is 25.82p per day - on Fix2year it is 32.393. Quite frankly, this is outrageous, has been known about (as a simple internet search reveals) for at least 5 years and needs to be stopped.
Page 2
    • PennineAcute
    • By PennineAcute 9th Feb 19, 5:04 PM
    • 355 Posts
    • 162 Thanks
    PennineAcute
    It is a fallacy that standing charge is used for transport costs,etc, even if this is what the energy companies tell you.

    The energy companies come up with a figure to charge, that will make them a profit. That charge is split between unit rate and standing charge.
    • Cardew
    • By Cardew 10th Feb 19, 9:50 AM
    • 27,798 Posts
    • 13,674 Thanks
    Cardew
    I am not advocating the standing charge should cover 'actual' costs, I am simply saying that for a single supplier, the standing charge should be the same irrespective of what tariff someone is on. It appears that the Ofgen cap restricts energy prices (usage prices), so companies change the standing charge to bolster income i.e. I cannot charge any more for the gas the person is using, but I can increase their standing charge.
    Originally posted by SteveJB58

    Not so! The energy cap is on the unit(kWh) price and DSC


    What is actually being capped?

    The cap is on the unit price of energy, and the standing charge.
    So the cost of electricity - for those on default tariffs - will be capped at 17p per kWh. Gas will be capped at 4p per kWh.
    Dual fuel users will pay no more than 177 a year for a standing charge; electricity-only users will pay no more than 83, and gas users 94.

    The price cap is 1,136 pa for a typical customer. According to Ofgem's definition a typical customer uses 3,100 kWH of electricity and 12,000 kWH of gas in a year.


    So if a company charged for 3,100kWh @17p and 12000kWh@ 4p that would cost 1,005 so the standing charge could be no more than 131 to keep it at the 1,136 limit.
    • matelodave
    • By matelodave 10th Feb 19, 10:34 AM
    • 4,391 Posts
    • 2,805 Thanks
    matelodave
    Cardew is correct, however you should also be aware that those who are not on a default tarrif (formerly the SVT) the energy companies can charge what they like for both the standing charge and kwh tariff.

    That's why some on complex metering have been hit quite hard and even the cheaper fixed tariifs have increased in price to compensate.

    You should still shop around to work out the best tariff to suit your consumption (and risk factor) but the differentials have been eroded by the imposition of the cap. Which by the way, supposedly saved the average default consumer around 70 a year on first of 1st of January.

    However it will increase by around 120 on 1st April, so you'll actually be guaranteed to be about 50 a year worse off with more to come on 1st October when they review it again.
    Last edited by matelodave; 10-02-2019 at 10:36 AM.
    Never under estimate the power of stupid people in large numbers
    • amcg100
    • By amcg100 10th Feb 19, 10:41 AM
    • 265 Posts
    • 277 Thanks
    amcg100
    The OP was complaining about the cost of standing charge on fixed price long term contracts. The Reason that energy companies charge more on long term contracts is that infrastructure costs may increase during the term of the contract and they protect themselves from this by increasing the standing charge.
    If a man does not keep pace with his companions, then perhaps it is because he hears a different drummer. Let him step to the music he hears, however measured or far away. thoreau
    • andyfzr
    • By andyfzr 10th Feb 19, 7:00 PM
    • 3 Posts
    • 2 Thanks
    andyfzr
    I am with Ebico and used to be on the no standing charge deal and it was great till the price cap came in and ruind it. I was paying 38 a month for duel fuel and claiming around 100 back once a year but the price cap meant it wasn't viable for them to do it at the prices set as I paid slightly more a unit but got no standing charge. The price cap meant they coouldn't charge the rate anymore so I had to go on a normal tarriff and now its costing me more and no more claiming money back for christmas. Thanks again to the greater powers interfering.
  • E.ON Company Representative: Malc
    E.ON Daily Standing Charges
    Having just looked at the tariffs on offer from E-On, I am very angry to see them using the standing charge as a means of generating extra money. Given the standing charge is SUPPOSED to cover the overheads of getting the gas to your house, why is it different for each tariff? To give one example: gas SC on standard tariff is 25.82p per day - on Fix2year it is 32.393. Quite frankly, this is outrageous, has been known about (as a simple internet search reveals) for at least 5 years and needs to be stopped.
    Originally posted by SteveJB58
    I am not advocating the standing charge should cover 'actual' costs, I am simply saying that for a single supplier, the standing charge should be the same irrespective of what tariff someone is on. It appears that the Ofgen cap restricts energy prices (usage prices), so companies change the standing charge to bolster income i.e. I cannot charge any more for the gas the person is using, but I can increase their standing charge.
    Originally posted by SteveJB58

    Hello SteveJB58 and already lots of good advice on here - thanks all.

    You're right, we do have different Daily Standing Charges depending on the tariff chosen. This reflects variations in the costs and benefits of individual products. To confirm what's already been said, Daily Standing Charges cover our costs when supplying energy to your home. Things like meter reading and maintenance, transporting energy to homes, the upkeep of the infrastructure, customer service costs, keeping you connected to the energy networks as well as additional expenses like environmental and social obligations.

    As Cardew says, these costs differ depending on many variables like location, types of property, specific circumstances etc. There are also other variables. For instance, it costs us less to manage accounts paid by Direct Debit and this is reflected in lower Daily Standing Charges for customers paying this way.

    Another aspect is we're now offering tariffs with an upgrade where we guarantee the standard fuel mix will be matched with 100% renewable electricity and 100% carbon offset gas. These tariffs cost more per month through higher Daily Standing Charges and are for customers interested in 'clean' energy.

    Additionally, a two year tariff will usually see higher daily charges than a one year deal as we build in a different level of expected cost increases depending on the respective periods the contracts run.

    Overall, we try to even these costs out as much as possible and include them in an overall tariff package. Given the different packages available, customers will see variations depending on their choice of tariff.

    To confirm molerat and Cardew's advice, the Price Cap covers both unit rates and Daily Standing Charges.

    Hope this goes some way to explaining why our Daily Standing Charges differ depending on the type of package chosen.

    Malc
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • Sterlingtimes
    • By Sterlingtimes 12th Feb 19, 3:37 PM
    • 1,645 Posts
    • 3,962 Thanks
    Sterlingtimes
    One supplier positions its price model as promising to supply gas and electricity at cost and then charging a membership fee to cover its own administration. Their membership fee seems to equate to a standing change.

    I would assume that the variable charge of most suppliers accounts for the supply including the total cost of delivery.

    Of course, the provider can position the pricing division as it wishes, but I doubt that the variable element applies to supply and the standing charge applies to delivery.
    Solar installed 21 November 2014 > Centre of England > 3,780 Wp > 14 *270 Watt Trina panels > 14 * Enphase micro-inverters > managed by Enlighten Envoy Hub > 19 west of south > 35 pitch > tree shading to east > iBoost > Wattson Anywhere monitoring > Schneider Electric (Drayton) MiGenie smart thermostat.
    • Obukit
    • By Obukit 12th Feb 19, 10:49 PM
    • 659 Posts
    • 1,149 Thanks
    Obukit
    It has to be said this is how most goods are supplied albeit they are hidden in one price.

    When you buy something from a shop you are paying both fixed costs - the cost of the shop existing - and variable costs - the costs of buying the products you purchase and sell them to you.

    Just like with utilities you can choose to shop somewhere with low fixed costs, like Aldi, vs high fixed costs, like a motorway service station. However, ultimately you still pay them.
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