We have today launched a review into standing charges. We want to find out your views about how standing charges are added onto electricity and gas bills. We also want to hear your thoughts about our ideas on other ways to cover the cost of things that it pays for if it were to be removed.
The standing charge is a cost that is included in each electricity and gas bill. It is a cost set by your supplier. It is also included in the energy price cap that we review and set every three months. Your supplier will charge you this cost each day, even if you do not use any energy on that day. The amount you pay will depend on your supplier and where you live within England, Scotland or Wales.
The charge covers the cost to maintain the energy supply network, take meter readings, and support government social schemes, for example helping people that cannot afford energy, and environmental schemes.
Some suppliers do not include a standing charge in their tariffs. Instead, they offer a tariff that works in a similar way, but you pay a bit more for the first one or two units called kilowatt hour (kWh) of energy you use.
Background to the review
Including a standing charge and how much to include in energy bills is complicated. If it were to be removed, then suppliers would still need to cover the costs like maintenance in other ways. It could mean that the cost of energy you use would go up. This could help some people to use less energy. However, people who cannot use less energy due to health problems or age, for example those who have electricity-powered medical equipment, would have higher bills.
Who should respond
We want to hear views from:
consumers, people who pay the electricity or gas bill in their household
energy sector, including suppliers
Feedback from the review will help us to set out recommendations in our formal consultation due to be published next year. This formal consultation will lead into a policy on standing charges.
We will also be holding focus groups with organisations such as Citizens Advice and charities.
The feedback to the discussion paper will help with any further policy development. Until then, we will continue to work closely with the government and engage with the energy sector, consumer groups and other stakeholders.
How to respond
Read our standing charges call for input discussion paper and reply with your views by Friday 19 January 2024.