Energy suppliers gave a cool reception to Ofgem’s plan for tariffs with lower standing charges and higher unit rates. Executives warned the change could confuse customers and worsen affordability.
Rachel Fletcher, Octopus Energy’s regulation director, said: “A lot of the concern about standing charges is just that people can’t afford to pay their bill. Where Ofgem is going is not going to solve any problems, it could make things worse.”
Bosses told the Energy Security and Net Zero Committee that customers might pick a low standing charge and then overpay on usage. Several urged the government to introduce a targeted social tariff for low-income households.
Energy UK has called for “enduring” support for vulnerable customers. Suppliers argued a social tariff would address affordability more directly than redesigning tariff structures.
The hearing came as Ofgem’s price cap rose 2% in October. Household energy debt hit a record £4.4 billion, with more than one million households in arrears without a repayment plan.
Executives said high wholesale costs remain the core issue, not how bills split fixed and variable charges. They cautioned that poorly chosen tariffs could leave some customers worse off.
EDF UK chief executive Simone Rossi said electricity’s price premium over gas deters electrification. Energy Secretary Ed Miliband said shifting policy costs from electricity to gas is under review but any change must be fair and genuinely reduce bills.
Backers of rebalancing say it would make heat pumps cheaper to run. Critics warn it could raise costs for gas-heated homes, with Centrica’s Chris O’Shea calling it a subsidy “from the poor to the rich.”
Energy bosses warn Ofgem’s standing charge overhaul could backfire appeared first on Energy Live News.