Ofgem has published an update on its review of standing charges, after responses to its call for input painted a “stark picture” of users’ dissatisfaction with the current system.
According to the regulator, tens of thousands of consumers expressed dissatisfaction with the current system, stating standing charges are “unneeded, unfair and confusing”.
The UK energy system is increasingly based on fixed costs, dictated by things like the cost of infrastructure, policies like the Warm Homes Discount and the customer services of energy companies.
Ofgem launched its call for input and review in response to the fact that some of these costs are increasing as the demand for electricity increases, necessitating infrastructure upgrades.
Balanced against consumer responses that called for reduced standing charges or their removal altogether, Ofgem said it received evidence that there would be a risk of harm to vulnerable consumers who are high energy users due to medical and health needs.
Citizens Advice and several disability charities said any charges would result in an increase in unit rates.
Ofgem’s update covers three main areas:
- meeting consumer demand for choice around standing charges and the tariffs they have available to them
- ensuring that consumers are properly protected from the downsides of making changes to standing charges now
- finding more sustainable solutions in the long term to how we can balance allocating and recovering the fixed costs of energy investment and delivery
Read more: Current+
