What is a standing charge?
A standing charge is a fixed amount that’s applied to your gas and electricity bill daily. These standing charges remain the same no matter how much energy you use. Put simply it is the cost you pay to have electricity and gas in your home. Both gas and electricity have their own standing charge. They pay for various costs including;
- Distribution Network charges,
- Local network charges for pipes and wires to your home,
- Meter reading charges,
- Maintenance charges,
- Rental from meter owner (Meter Asset Provider)
There will also be costs related to government schemes included in your standing charges. Examples of these schemes include ones that aim at CO2 reduction and ones that are designed at aided homes in need. These costs are not directly linked to your individual usage.
Why did the standing charge increase?
The costs connected to the standing charge has increased.
One example of this is Distribution Use of System (DUoS). These charges apply to every connection to the electricity distribution network and are to collect the revenue the Distribution Licensee needs to build, operate, maintain, repair and invest in the network.
DUoS charges are one component of your electricity bill and typically represent around 15% for a domestic customer.
The Distributor charge People’s Energy a combination of a charge per meter connected to its network and a charge based upon the amount you use the network. For example, one such distributor increased its charge per meter by 10.02% this year.
Another increase is the metering charges. The costs associated to collecting meter readings have increased more than 3% year on year.
Why does the standing charge differ from region to region?
You may notice that the standing charge changes depending on what area you live in. This is because each region has its own distribution costs. Electricity is supplied to households through Distribution Network Operators (DNOs) and energy suppliers.
Each network will set prices as they wish for each region. These charges are also increasing.
There are 14 licensed geographically defined regions of the UK with DNOs serving each one. Each region is different, and that’s in part down to the amount of energy they can generate and the price of generating that energy.
Some regions can get their energy supply for a little cheaper than others because they have a more abundant supply of fossil fuels or renewable energy. Other regions might have plenty of customers but not enough cheap energy generating solutions, so the supply will be more expensive by the time it gets to your home.