/ Home & Energy

The standing charge lottery on your energy bills

Which? energy campaign logo

Rising energy prices are consistently one of our biggest worries, but many don’t switch because the market’s too complicated. And our latest research shows a huge variation in standing charges on our energy bills.

I like to think of myself as a savvy customer who gets a good deal on most things I buy. And it’s no different with energy bills. The only problem is that it’s pretty tricky to work out whether I’m paying more than I should for my gas and electricity.

When I buy a new book or DVD I can compare prices across different shops. And when I fill up my car with petrol I can avoid the really expensive garage in town. But, having just moved house, I now need to decide on an energy supplier

Confusing energy prices

So all I need to do is look at how much suppliers charge for their gas and electricity and pick the cheapest one; right? Wrong. Most energy firms split their prices into a confusing array of different rates and standing charges; the latter being a fixed amount applied to your bill daily or annually.

So to even get a rough guess-timate of which tariff will be the cheapest for me, I need to know how much energy I use. Now, this might be just about possible for people whose energy consumption is pretty consistent. But I’ve just moved to a completely different type of house and have no idea how much gas and electricity I’m likely to use this year.

It would be like pulling up to a petrol station and the prices at the pump changing depending on how fast you drive or how many miles you cover.

Huge variation in standing charges

Our latest investigation has revealed the huge variation in standing charges for just one customer. We looked at the range of gas, electricity and dual fuel deals on offer for a specific customer in one region of the country – we found 109 different tariffs including some 75 different standing charges.

And if you think that’s mind-blowing, then factor in all the different regional variations, types of meter, payment methods and so on and you’ll find thousands and thousands of different prices across the country.

Most energy firms say that the standing charge covers fixed costs, such as bills, meters and distribution. But why would these so-called ‘fixed costs’ range from zero up to £402 a year on individual gas and electricity deals combined?

It also seems strange that standing charges can vary widely even within the same firm – leading me to question whether standing charges really relate to ‘fixed costs’ at all.

A low standing charge doesn’t mean a low bill

You can’t even assume that a high standing charge means the highest bill. As our illustration shows, a customer using a lot of gas can be better off with a higher standing charge:

Energy standing charges comparedThis bewildering array of charges is yet another example of how the energy market’s too confusing for us to find the best deal. That’s why Which? has been calling for simple tariffs, without standing charges, displayed in the style of petrol forecourt prices, so that we can all easily spot the cheapest deal.

Ofgem’s current reforms to simplify the energy market don’t go far enough, as companies will still be allowed to include a standing charge and a unit price. If the government fails to take more radical action, such as by introducing a single unit price, we won’t feel confident that we’re paying a fair price for our energy.

Do you find gas and electricity standing charges confusing?

Comments
Guest
Trevor Surrey says:
20 October 2013

Trouble is its all right to say change your supplier then what happens they put there prices up so you cant win since they privatized the Energy Industry we are being held to Ransom .God help us if as it seems possible we get a really bad winter like 1962/63

Guest
Telent says:
2 November 2013

My quarterly bills from Cooperative Energy include a historical usage summary of my gas and electricty usage for the past 4 quarters, giving me annual usage data. This is essential information for running price comparisons . It is also useful to see whether one’s usage is increasing or decreasing over time. Do other suppliers provide this information?

Guest

Telent, npower gives me this for current and previous years.

Guest
Ann T says:
21 February 2014

I switched to a company called D-Energi for our small bed and breakfast but had not realized that they charge a distribution fee of 98p a day for both gas and electricity as well as a Kwh charge and a standing charge per day. I was also surprised that I will be charged a minimum annual charge based on the previous year and not on the amount of energy we use.

Unfortunately the salespeople are absolutely charming and persuaded me to sign within an hour or so and send back to secure rates. I checked the quoted Kwh and standing charge but did not read carefully enough the extra charges as the salesperson had not alerted me to any extra charges and presumed the only extra charges were VAT and Climate Change Levy.

Feel a fool as I am stuck with them for a year and the termination charge is £7,000.

Guest

I wonder whether you might be covered by the doorstep regulations – http://www.gov.uk/doorstep-selling-regulations – which give certain cancellation rights.

Guest
Dianne says:
28 February 2014

SCOTTISH POWER AND STANDING CAHRGES
I do not use gas, although I do have a gas metre. Scottish Power have just informed me that the government has made it compulsory for companies to impose a Standing Charge on their meters even if they are not used. Comments, anybody?

Guest

If you don’t use gas then there is no need for you to have a gas supply contract. The presence of a meter is neither here nor there; the supplier can remove it if they wish.

Guest

My gas was with Scottish Power too, i never used Gas and they had a no standing charge so it was perfect, Till last month and they billed me and it turned out they scrapped standing charged in December but didn’t bother telling me.

I really kicked off on Twitter bad and with the help of Which Scottish Power cancelled the bill, gave me £50 compo for not letting me the tariff was changing and my gas supply is now with Ebico who I have had my elec with the for years.

http://howilivemylife.co.uk/special-blog-postscottish-power/

(Legally every energy supplier now has to have a standing charge, so Ebico’s is £0.00)