Standing Charges

 Electricity Standing Charges 

You may have wondered, with me, why the so-called 'standing charge' on your electricity bill has gone up. This charge, expressed as x pence per day, is explained as the cost of attaching you to the grid. Well, that has surely not gone up in response to the Russian invasion of Ukraine, so why did the standing charge leap up  this spring from e.g. 25p to e.g. 35p?

Well, it turns out it is not because of a sudden change in the cost of connecting you to the grid, an idea I had already dismissed. Nor is it simply a case of opportunistic profit taking, which was my next thought. It seems it is a rather clumsy way of recompensing the surviving supply companies for taking on the customers and the debts of the recently bankrupted supply companies. 

I call it clumsy because I think it loads the debt onto the wrong people, and in the wrong way. It might be that the surviving supply companies were already overcharging their customers, and that is why they survived. Or they operate a more efficient business, in which case why penalise them (and their customers)? 

The whole business of standing charges seems to me to be wrong. When you buy a box of matches you do not pay a surcharge to cover your share of the factory, and operating costs; those are factored into the unit cost. It is true that a small user of electricity will incur similar connection and billing costs to a large user. But a tiny integrated charge would cover that, and the sparing user would be maximally rewarded for his frugality. At a time when the whole world is trying to minimise fossil energy consumption, lowering the unit cost by hiding it in standing charges seems to me to be wrong-headed.

(A parallel argument applies to water supplies. I noticed that my neighbour sprayed tap-water all over his garden while I collected rain-water in butts. I figured that he was not on a meter. And concluded that there was insufficient inducement to go onto a meter; especially for large users like my neighbour.)

I believe some suppliers of electricity make no 'standing charge', and do indeed incorporate the cost into the unit price. However, most companies do make such a charge. Why is that? Is it just a way of confusing the buyer who looks only at the unit price when choosing a supplier? I believe I use considerably less than the average amount  of electricity (see my next blog), and consequently am paying an inordinate share of the debts of the bankrupt companies. I must track down a company offering zero standing charges. It seems to me to be a more straight-forward way of selling a utility.