Energy bills: Plans for new tariffs with no standing charge

When Ofgem asked for the public’s views on standing charges it received an unprecedented response of 30,000 submissions.

The majority were against standing charges – fixed fees, typically totalling more than £300 a year, that are paid irrespective of how much energy households use.

Under Ofgem’s price cap, standing charges have risen by 43% since 2019.

Those with low energy usage, such as people who live alone, argued that even if they further reduced how much gas and electricity they used, they saw little difference in their bills. They wanted more control over their bills.

However, those with high energy needs could see a big rise in bills were these charges to instead be included in the price of each unit of energy used. It would mean higher bills for people with disabilities who have to charge up specialist equipment.

“We hear from people who’ve turned off their heating, ration their hot water, and avoid charging essential mobility devices, yet still feel like they’re fighting a losing battle with their energy bills,” said Alex Belsham-Harris, from Citizens Advice.

Ofgem’s proposed solution is to tell energy firms to make a dual pricing offer – one with, and one without, a standing charge. Both would fall under the existing price cap system.

Such tariffs already exist, but only from a handful of suppliers and are not available to everyone.