Major overhaul to standing charges could help SLASH energy bills | The Sun

Major overhaul to standing charges could help SLASH energy bills | The Sun

June 9, 2022

A MAJOR overhaul to the standing charge could help to SLASH energy bills.

Ofgem's boss said this morning that the energy regulator will look to see if the standing charge can be reduced as energy bills soar.

The energy watchdog's chief executive Jonathan Brearley said the charge would be reviewed as the energy price is due to increase to £2,800 in October.

It means households could see their bills go up by a further £830.

The standing charge is a cost applied automatically to your energy bills before any gas or electricity is used.

It has jumped from 25p to 45p a day.

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Meanwhile, gas prices have jumped to 7p from 4p, and the standing charge is up from 26p a day to 27p.

Billpayers were furious about the hike in April, and said they were confused over what the standing charge actually covers.

But Mr Brearley told BBC Breakfast that Ofgem could slash this charge – meaning customers could be paying less on their bills.

He said: "One thing we are doing is looking at how that standing charge is made up.

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"We are looking at components of it to see, potentially, if it can be reduced."

He added that Ofgem is looking into how it can ensure households are paying a "fair" price for their energy bills.

The standing charge is a fixed cost so unfortunately you can’t reduce this part of your bill by using less energy.

Standing charges cover the cost of running and maintaining the energy network, a bit like line rental with a landline phone.

It also covers the cost of failed energy firms and more than twenty have gone bust recently because of rocketing wholesale prices.

The amount charged varies across the country but the energy price cap does still apply.

Ofgem said suppliers can set their own standing charge and tariff rates, as long as bills don't exceed the average total amount.

It means the south of England often has higher standing charges as well as remote parts of Scotland and Wales.

What help is there if I'm already struggling with my energy bills?

Households are already struggling to cover the cost of their energy bills, so further rises will only mean they need more support.

Your first step should be to contact your energy supplier.

They may be able to change your payment plan or check if you're eligible for their hardship fund.

For example, British Gas and Octopus have both set up funds to help customers who are struggling with their bills.

You should also check that you're getting all the benefits you're entitled to.

Use an online benefits calculator to make sure you're not missing out on any extra cash.

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Similarly, you can search for grants that can help you pay for gas and electricity bills.

You'll also be in line for a £400 energy bill discount from October.

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