The NPC applauds Ofgem’s decision to review Standing Charges applied to people’s energy bills to cover the cost of connecting to a supply.
But we warn energy regular Ofgem, and the government, that any alternative scheme must include extra protections for customers struggling to pay, or who have high energy use needed for medical reasons.
The NPC has been campaigning for an end to the much-criticised Charges, which have doubled over the last two years.
Jan Shortt, NPC General Secretary said: “We welcome the Ofgem plans to look at the impact of Standing Charges applied to energy bills. In many cases, the Standing Charge together with the VAT make up around two-thirds of consumer bills. This is unacceptable in the light of the current cost of living crisis.
“The government may wish to cite the fall in inflation to try and maintain the Standing Charges system. But energy and food prices are still high, and the increase in these Charges only serves to add to the already inflated profits for suppliers.
Jan added: “There has to be a balance for those who need energy most to keep warm, healthy and safe, and those consumers who have cut back on energy usage because they cannot afford the bills.
“The NPC will be responding to the Ofgem review and encouraging our members and the general public to feedback their views and alternative suggestions to the current charging system.”
How much you pay in Standing Charges, which are capped by the regulator, varies depending on where you live – the amount of energy that you use is irrelevant for this segment of your energy bill.
In most areas the typical household pays 53p a day for electricity and 30p a day for gas, which can add an extra £300 to the total bill each year.
Energy companies are not obliged to have a standing charge and can charge less than what is set out in the price cap. There are already tariffs on the market with no standing charge but a higher unit rate.
After a wave of criticism over the charging system, Ofgem is now asking charities, consumer groups, businesses, bill-payers and suppliers for their views on the standing charge, and for proposals on alternatives. It is the first time since before the energy crisis of 2021 that the regulator has reopened the public debate around how the standing charge is spread between customers.
The Review is open for submissions until 19th January 2023.
Email StandingCharges@ofgem.gov.uk Or write to Standing Charges Review, Ofgem, 10 South Colonnade, Canary Wharf, London E14 4PU
Download the press release