Standing charges: domestic retail options
Call for input
- Open
- Closed
- Publication date
- Closed date
- Industry sector
- Supply and Retail Market
- Licence type
- Electricity Supply Licence
- Gas Supplier Licence
Related links
Updated 12 December 2024
We asked
We wanted to get views from energy suppliers, consumer groups and household bill payers. We also wanted to hear from industry groups and network companies.
You said
We received over 5,000 responses from individual consumers either independently or as part of email campaigns. Those responses mainly called for us to take action to reduce standing charges, with most domestic consumers calling for them to be abolished outright.
They also felt that standing charges led to lack of reward for using low carbon technologies, such as solar panels. Many felt that some of the costs that are included in standing charges, such as the Warm Home Discount (WHD), Supplier of Last Resort (SoLR) costs, and the costs of upgrading the grid to meet net zero, are unfair to place on consumers and should be met through government taxation or energy suppliers’ profits.
We also had responses from energy suppliers, charities, consumer groups and others within the energy industry. They were more cautious about reforming standing charges, including with concerns about the potential effects of reform on vulnerable consumer groups, such as disabled consumers with inflexible high energy needs.
A large number of the responses from suppliers, charities, consumer bodies, energy industry stakeholders, and individual consumers highlighted their view that an energy social tariff would be relevant to our standing charges proposals, in order to support consumers who are facing affordability challenges.
We did
In early 2025 we will consult a zero standing charge option within the energy price cap, alongside the existing tariff. Read about our next steps and plans for our standing charges work in our update on our standing charges review.
Original consultation
Who should respond
We would like views from energy suppliers, consumer groups and household bill payers. We would also like to hear from industry groups and network companies.
Background
Last year we started a review of standing charges. Our call for input had feedback from over 30,000 customers, consumer groups, charities and others.
We have now reviewed the feedback and have set out our options to reduce standing charges for households, called ‘domestic standing charges’.
This options paper talks about reducing domestic standing charges by moving some charges to the unit rate. It also considers options to increase consumer choice by increasing the range of standing charges offered by suppliers.
The paper also outlines what we will consider as part of a broader review of how network costs are recovered from users.
We think that there is an overall benefit from the changes discussed in this paper, but some consumers’ bills would increase. We are working together with government on how the impact on households in the domestic retail market could be reduced.
Standing charges are set by your energy supplier and are also included in the energy price cap. Your supplier will charge you this cost each day, even if you do not use any energy on that day. The charge covers the cost to maintain the energy supply network, take meter readings, and support government social and environmental schemes. You can find information to help understand your electricity and gas bill.
Why your views matter
The options paper continues the discussion we started last year about standing charges. We want to hear your views on the options given but would also like to hear any other feedback that may not be covered.
How to respond
This discussion closed on 20 September 2024. You can still read our standing charges options paper.