Thursday 16 November 2023

Ofgem revisits standing charges in energy bills

Ofgem revisits standing charges in energy bills

Ofgem has initiated a call for input on standing charges, the daily fee customers pay regardless of energy usage.

This charge covers fixed costs, including maintaining infrastructure and staffing.

Although the standing charge is regulated by the energy price cap, the energy regulator is exploring alternatives and seeking input from various stakeholders.

The standing charge has been a topic of extensive debate recently, considering the broader cost of living pressures.

The price cap limits what suppliers can charge for the standing charge, but companies can choose not to impose it.

While some tariffs have no standing charge, they may have a higher unit rate.

Ofgem's call for input marks the first time since the 2021 energy crisis that it has explicitly reopened the debate on standing charges.

Director for Markets at Ofgem Tim Jarvis said: "However we proceed, there is a difficult balance to be struck, which is why it is important as many as people as possible respond to our call for input with their experiences of it, how it affects them and what the alternatives could be."

Written by

Sumit Bose

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