The headline energy prices have fallen slightly in April 2024. But you needed to look beyond the headline to spot that whilst the unit cost of electricity has fallen slightly, the standing charge has risen (yet again). We call this “the standing charge sleight of hand.” Increasing the standing charge is a deliberate policy choice. The standing charge is less politically charged than the unit cost. However, it is socially divisive and dis-incentivises folk to reduce their overall energy use.
The social impact. Consider the single elderly person living independently. This person is paying the same standing charge as a family of 5, or as all the tenants in a House of Multiple Occupancy (HMO). This may have been OK when the standing charge was a relatively small part of the overall bill. But this April, the standing charge from Octopus will rise by 13.9% in the Huntingdonshire region, to 47.849p per day. The OFGEM price cap price is even higher, at 60.10p per day or £219.37 per year. And it is effectively a hidden charge, since it is wrapped up into the wider energy bill. No one pays their standing charge as a discrete bill.
Dis-incentivising. Since the standing charge is fixed, and there is this very substantial irreducible minimum charge for your electricity, it reduces the incentive for folk to cut their energy use. This is because even if you were to reduce your electricity use you cannot benefit from a commensurate reduction in your bill. In other words, if you reduce your energy use by 10%, you do not get a 10% reduction in your bill since such a large part of the bill is fixed.
At Brimstone Energy UK we believe that there should be no standing charge sleight of hand. There are other ways to structure the bill. Perhaps the energy supplier should supply the energy and the infrastructure supplier should charge a connection fee to connect to their network. And perhaps any other social or green levies should be paid by central government rather than the bill payers.
Straight forward and socially responsible. The Brimstone Energy way. Check out the Brimstone Manifesto for more information.
Brimstone Energy UK – For all your home energy needs.
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