Reaction to Ofgem’s consultation on changing the way standing charges are added, or not, to bills has been mixed. Some welcome the idea but there is also wider caution on its implementation.
Trade body, Energy UK’s CEO Dhara Vyas said: “We need to study Ofgem’s proposals in detail but the addition of a zero standing charge option could significantly change the nature of the price cap – from a single regulated price that gives customers price protection whether they shop around or not, to a situation where customers are expected to make an active choice about which cap they are on.”
She warned axeing Standing Charges altogether would be unfeasible; “t’s important to appreciate that they cover costs that are incurred by all customers irrespective of the amount of energy they use – such as paying for the infrastructure needed to deliver energy safely to our homes through network charges.
“Ensuring suppliers can recoup these costs in way that is fair to all customers is a difficult balance.
At Citizens Advice, there was also a tinge of concern, to ensure the most vulnerable were not penalised by the shift.
Alex Belsham-Harris, Head of Energy Policy said: “It’s vital that changes to standing charges avoid driving up bills for low-income households who have higher energy needs.
“We welcome Ofgem’s announcement to act on debts built up during the energy crisis by improving protections and looking at ways to support people with otherwise unmanageable sums.
“We now need to see the government urgently introduce energy bill support that’s targeted at people who need it most to prevent debts continuing to mount in the future”
Richard Lane, Chief Client Officer at StepChange – a debt charity which is part funded by energy companies, said: “This wide-ranging consultation, geared towards supporting people struggling with energy debt, is hugely welcome.
“We have consistently called for a Help to Repay scheme, alongside sector partners, to help households tackle unaffordable energy arrears that have built up over the past few years – so we’re encouraged to see that a debt relief scheme is being explored.
“Amongst StepChange clients, energy arrears have increased by a third since January 2024 and now stand at an average of £2,601.
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