Standing Charges for Energy

 Dear OFGEM,

You ask for feedback on the question of Standing Charges, (to the email address StandingCharges@ofgem.gov.uk.)

I have been against Standing Charges for a long time, both in regard to energy and water. There is, of course, a certain cost involved in connecting a house to the grid and in providing a meter, even when energy is not used. And some charge for those services is legitimate. (It cost a deal of money to build a car-making factory, a cost that is shared among those who buy cars, but not by is not imposed on those who do not buy cars.)

However, there is no reason why that standing energy charge should increase when the cost of fuel increases!!! It is clear that companies are using Standing Charges as a way to mislead customers into thinking that their electricity is cheaper than that of rivals, because their unit cost is cheaper. 

It is true that customers have no need to be fooled in this way; they can choose the company with the lowest standing charge (as indicating the most honest). Or they can do a more elaborate calculation using their own personal daily energy consumption.

There are two reasons why OFGEM might step in to moderate this ‘deceitfulness’. In a warming world with looming deadlines, there is some virtue in pressing down on the consumption of energy with a modest but consistent pressure. This effect is maximised when the standing charge is minimised.

For OFGEM to condone the practice of shunting some of the energy price rises into Standing-Charge-rises is to sully the reputation of OFGEM.

Yours sincerely, Ian West

Refs: 

[1] https://occidentis.blogspot.com/2022/09/standing-charges.html; 

[2] https://occidentis.blogspot.com/2022/10/average-electricity-consumption-part-2.html

(If you write to StandingCharges@ofgem.gov.uk, you might consider copying me in at: cawstein@gmail.com )