{"id":100004,"date":"2024-12-18T13:06:24","date_gmt":"2024-12-18T13:06:24","guid":{"rendered":"https:\/\/en.econostrum.info\/?p=100004"},"modified":"2024-12-18T13:06:29","modified_gmt":"2024-12-18T13:06:29","slug":"energy-bills-shakeup-octopus-zero-standing","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/energy-bills-shakeup-octopus-zero-standing\/","title":{"rendered":"Energy Bills Shake-Up: Octopus Energy Speaks Out on Zero Standing Charges"},"content":{"rendered":"\n<p>The UK energy regulator, <strong>Ofgem<\/strong>, has unveiled plans requiring energy suppliers to offer tariffs without standing charges alongside existing ones by next winter. <\/p>\n\n\n\n<p>This move aims to give households greater choice in managing energy costs, particularly as standing charges have risen sharply, disproportionately affecting low-energy users.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Understanding Standing Charges: A Growing Concern for Energy Consumers<\/h2>\n\n\n\n<p>Standing charges are fixed daily costs that cover the infrastructure and maintenance of <a href=\"https:\/\/en.econostrum.info\/energy-efficiency-at-home-standby-appliances\/\">energy<\/a> supply, regardless of how much energy a household uses. For dual-fuel customers, these charges have increased by <strong>43% since 2019<\/strong>, now averaging <strong>\u00a3338 annually<\/strong> under Ofgem’s price cap. <\/p>\n\n\n\n<p>Additionally, from January 1, they will slightly decrease to <strong>60.97p\/day for electricity<\/strong> and <strong>31.65p\/day for gas<\/strong>, but these costs remain a contentious issue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Balancing Choice and Fairness in Energy Pricing<\/h3>\n\n\n\n<p>Ofgem’s proposal will require suppliers to provide <strong>zero standing charge tariffs<\/strong> as an alternative to standard tariffs. Such tariffs would have no fixed daily cost but would likely come with higher unit rates for energy consumption. <\/p>\n\n\n\n<p>Although, this could benefit low-energy users but might disadvantage those with higher energy needs, such as those relying on medical equipment at home.<\/p>\n\n\n\n<p>Tim Jarvis, Ofgem\u2019s director general of markets, explained:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cMany people feel strongly that standing charges are unfair… By having a zero standing charge tariff, we would create that choice for everyone.\u201d<\/p>\n<\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\">Industry Reactions to Ofgem’s Zero Standing Charge Proposal<\/h2>\n\n\n\n<p>Energy companies like <strong>Octopus Energy<\/strong> welcomed the intent but called for more clarity. Rachel Fletcher, Octopus Energy\u2019s Director of Economics and Regulation, emphasized the importance of minimizing overall network and balancing charges rather than just shifting costs:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cWe need more detail to ensure it genuinely helps those worst off.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p>However, advocacy groups like <strong><a href=\"https:\/\/www.nea.org.uk\/\" target=\"_blank\" rel=\"noopener\">National Energy Action<\/a><\/strong> criticized Ofgem for not taking bolder action, especially regarding prepayment meter users, who are disproportionately impacted by high standing charges. Peter Smith, the charity\u2019s director of policy and advocacy, labeled the lack of significant reform “extremely disappointing.”<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Ofgem’s Proposed Solutions Amid the Energy Crisis<\/h2>\n\n\n\n<p>The energy crisis has exacerbated household debt, which reached <strong>\u00a33.82 billion in September 2023<\/strong>, a <strong>91% increase in two years<\/strong>. <a href=\"https:\/\/en.econostrum.info\/cost-of-living-crisis-uk-bill-increases-2025\/\">Ofgem<\/a> has proposed a “debt guarantee” to improve supplier support for households in debt, including requiring suppliers to accept repayment plans from third parties.<\/p>\n\n\n\n<p>Martin Lewis, founder of MoneySavingExpert.com, criticized standing charges as a “\u00a3338-a-year poll tax” on energy bills, disproportionately affecting low users. He urged Ofgem to default vulnerable households onto no-standing-charge tariffs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Navigating the Impact on Larger Households and Vulnerable Consumers<\/h2>\n\n\n\n<p>While zero-standing-charge tariffs could benefit some, higher unit rates may burden larger households or those with essential energy needs. Ofgem\u2019s challenge will be to strike a balance, ensuring that changes don\u2019t inadvertently harm low-income households with high energy requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Upcoming Changes in Energy Pricing<\/h3>\n\n\n\n<p>The new rules are set to take effect by <strong>winter 2024<\/strong>, giving households time to explore and compare their options. Meanwhile, calls for government intervention to address high standing charges and protect vulnerable groups are intensifying.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ofgem\u2019s proposed changes to energy tariffs aim to give households more control over their bills. Energy suppliers, including Octopus Energy, have responded to the plans, raising questions about their impact on consumers and fairness in the energy market.<\/p>\n","protected":false},"author":6,"featured_media":100005,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[39],"tags":[],"class_list":["post-100004","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/100004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/comments?post=100004"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/100004\/revisions"}],"predecessor-version":[{"id":100019,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/100004\/revisions\/100019"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media\/100005"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media?parent=100004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/categories?post=100004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/tags?post=100004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}