Give customers simple prices & end energy market confusion

Ofgem requires all suppliers to include a single unit rate plus a standing charge – but that standing charge can be zero. There are a number of gas suppliers who have a £0 standing charge – switch to them if you are a very low user.

There are two main choices:-

1. A standing charge (eg per day) plus a unit price for what is consumed. or

2. No standing charge, but a higher unit price for what is consumed.

A low usage might be cheaper with option 2, even though the unit price is higher. Higher consumption is almost certain to be cheaper with option 1. The energy companies will certainly recover all their costs and make their profits, whatever the choice of tariff they provide. The only other way of guaranteeing lower costs for poorer people (whether they be pensioners or families on low incomes) is to operate a subsidy, whereby better off people pay over the odds to fund a subsided reduction for poorer people.

The big question is should we rely on the energy companies to make these evaluations and apply their rules to charge more for some people so they can charge less for others? Or is it the role of say the Benefits Agency to supplement poorer people’s incomes to enable them to pay the normal price ? Most would say the latter is best because if you do it through the supplier, then why stop at energy companies ? The next thing would be two tier pricing in supermarkets.

Thanks but:-
UKPower comparison site said there weren’t any gas with zero standing charge. Then using other searches only found EBICO offering gas with standing charge zero. This issue was raised today on Radio4 Moneybox program.

What matters is your total annual bill. A supplier offering zero standing charge will recover fixed costs through a higher unit charge. Average annual domestic gas consumption is 15-16000 kWh. My calculations show that using Ebico, with zero standing charge, and Daligas with a daily standing charge of 19.22p, Daligas come out cheaper when you consume 3100 kWh a year or more. So You would have to be a very low consumer not to be better off with a standing charge

example of low user and standing charge over 90 days,Gas £8.70p standing charge£25.03p, Elec £63.20p standing charge£22.53,so yes so very unfair,we are told to keep consumption down,and this is what they do to you,thats Eon by the way.

E-ON’s standing charges for current tariffs seem to be Elec £0.16422 and Gas £0.21903. This would be £13.07 cheaper than you quoted over 90 days. There are also cheaper unit rates from other suppliers. Have you looked at whether you would benefit from switching?