The standing charges on energy bills should be abolished or reduced, bosses in the sector have said. The boss of British Gas owner Centrica said on Friday that the system penalises those who try to keep their energy bills under control by reducing how much gas and electricity they use.
The standing charge is a fixed amount that people pay on their energy bill and does not change based on usage. It is used to pay for many things, including the upkeep of the electricity and gas grids. From Saturday, July 1, the latest price caps sets the standing charge for electricity at 53p per day and gas at 29p per day. That means that a household using both fuels will pay around £25 a month before using any energy. Those with just electricity will pay about £16.
Its critics say it is an unfair system which gives people less control over their energy bills. It could mean a household which only uses gas for heating their home, and not for hot water or cooking, will still be charged during the summer months when their heating is off. Although such homes are rare, it could leave people with charges they do not understand and can do nothing about.
