Charities and energy providers have criticised plans to change the way standing charges on bills are paid. All households pay the fixed daily charges covering the costs of connecting to a gas and electricity supply. Many billpayers consider them to be unfair as they have no control over how much is charged, prompting the review by the energy regulator Ofgem.
But the regulator’s plans to offer a choice of tariffs that shift these fees elsewhere on people’s bills have been described as complicated and misplaced.
The regulator, Ofgem, has proposed to offer a “no standing charge” solution, which would see customers paying a higher price for each unit of energy. This would give customers “choice and more control” over how they choose to pay for their gas and electricity, according to Charlotte Friel, from Ofgem.
However, a string of charities, and the energy suppliers’ trade body, have criticised the proposals as failing to address the basic cost of standing charges and creating a much more complicated picture for billpayers.
They say that the plans simply shift the problem and do not reduce the standing charges, making them less affordable for vulnerable customers. They also worry that those customers may unwittingly make the wrong choice, leading to them paying more for their gas and electricity.
The charities and suppliers argue that the regulator should focus on reducing the cost of energy overall, rather than just shifting the standing charges around. They point out that customers are already in debt to suppliers, with a collective debt of £3.8bn.
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