Energy standing charges review

[ericmark]

Reading this on the BBC it seems people do not like the standing charge and Ofgem is reviewing the system.

Clearly the energy providers need to make money, so to loose the standing charge will mean raising electric prices to cover, those of us with solar are clearly going to gain, paying very little for energy, but those who can't have solar power are going to have a lot higher bills, hard luck for those who live in all electric flats.

People can submit their views via email to [email protected] by 19 January.

How can users work out the cost to provide the service compared with the price of the actual energy? Personally my batteries are not big enough to live off grid, I need the ability to use grid power. But my use has dropped since having solar, so the energy company is going to get less money from me. By increasing battery power I could reduce that further, and instead of exporting at some times of the day and importing at others, in other words using the grid as my battery to some extent, I could store and use it myself.

But I would still want the ability to draw from the grid when we have poor weather, just at the point where the grid is also having to put on extra generators, should I get that option for free? Or lower cost?

Interesting to see what others think? Clearly for me reduction in standing charges is good, but what about those without solar panels?

 

[Murdochcat]

Simple answer is to include the standing charge in the unit cost BUT make the first 500 kWh per month free of such charges and this way the high users will bear the brunt AND the frugal will save the most

 

[big-all]

it used to be the first say 250units a month was charged at 1/250th off the months standing charge on top
the actual amounts are wrong but it was the principle off how it used to work

it was quite handy when my boiler broke down i had to use electric but the lack off any gas usage meant the expensive replacing gas with electric for heating but a bit off reduced heating meant no real impact on costs

 

[JohnW2]

... Clearly the energy providers need to make money, so to loose the standing charge will mean raising electric prices to cover, ...

Indeed. I don't think it unreasonable that there should be a 'standing charge' even for consumers who use little or no electricity (but has it 'available'), since there clearly is a cost (to supplier) of 'providing the service' - such as providing, installing and maintaining/replacing meters, admin and, of course, what charges get 'passed on' from DNO for providing and maintaining the supply network.

The alternative would be,as you say, to abolish standing charges and hike up usage costs to compensate, but that is not necewssarily 'fair' to everyone, either.

Kind Regards, John

 

[JohnW2]

Simple answer is to include the standing charge in the unit cost BUT make the first 500 kWh per month free of such charges and this way the high users will bear the brunt AND the frugal will save the most

Some suppliers use to do (and maybe still do) the opposite of that - namely charging more per unit for the first X units, and then a lower unit price beyond that. In that way they recovered an amount equivalent to a standing charge (but no more) from most customers.

A problem with what you suggest is that (whilst it would make little difference to 'average consumption' consumers, and would be beneficial to those with low consumption) people with more than average consumption would end up paying more ('for nothing') than they would with a standing charge, increasingly so as their consumption increases.

Kind Regards, John