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Massive standing charge inflation- why?

  • 12 April 2024
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Why has my standing charge gone up from:

24.61p per day in 2022 to

43.39p per day in 2023 to

60.31p percday from 1st April 2024?

This is way higher than inflation. 

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Best answer by Firedog 12 April 2024, 11:51

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Firedog
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The Standing Charge is set by Ofgem in the Price Cap, to cover costs other than that of fuel. You can see what’s included here: Energy price cap | Ofgem. Changes over the past few years are shown in the chart below. The orange bit at the top of each bar is the cost of fuel, and everything below that is in the Standing Charge. This image is reproduced from this interactive Ofgem page.
  

 

There’s much more detailed information available at the Ofgem site.

Noel | I have no official status; I'm just a volunteer who comes here to help other customers. My gear: Aclara SGM 1416-B Electricity-only E7 meter; Chameleon IHD3-PPMID-AAA
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Thanks very helpful. But sadly this doesn't explain why OVO has put standing charge up in 2 years by 145%. 

The chart above suggests Ofgem have recommended a ~50% increase.  

The numbers do not tally. 

It must just be OVO....

Blastoise186
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OVO is only required to cap the Standing Charges for Standard Variable Tariffs. If you’re on a Fixed Rate Tariff, OVO can legally charge whatever they want since you have to explicitly agree to be charged that rate before OVO can make you pay it.

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Firedog
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… OVO has put standing charge up in 2 years by 145%. 

 

Which months are you comparing? You’ll see that there’s an enormous difference from January to December 2022.

There are big differences in standing charges around the country. The differences were much less last year than this, but I can’t work out from the figures you quote which region you’re in. 60.31p/day is pretty close to the GB average, but rates vary from 40 to 72p depending on where you live; some regions saw the standing charge fall on 1 April, while others saw a significant increase. There are also different rates for those who pay by Direct Debit and those who pay on demand. And, of course, they don’t apply to fixed-rate tariffs, as Blastoise points out.

  

The chart above suggests Ofgem have recommended a ~50% increase.  

 

Ofgem’s figures aren’t recommendations: they’re mandatory limits that no supplier is allowed to exceed. I can well believe that you’re seeing a major increase, but we’d have to have precise details (payment method, region, dates and rates, including or excluding VAT) before we’d be able to explain where the increase comes from.

 

Noel | I have no official status; I'm just a volunteer who comes here to help other customers. My gear: Aclara SGM 1416-B Electricity-only E7 meter; Chameleon IHD3-PPMID-AAA
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Hi

I looked back over the (total annual) standing charges on my account (dual fuel, economy 7). Since Jan 2022 they have increased by 73% (133% if I go back to Jan 2021).

Jan 2021    £135.77
Jan 2022    £182.85
Apr 2022    £263.74
Oct 2022    £276.02
Apr 2023    £290.25
Jul 2023      £290.25
Oct 2023    £290.20
Jan 2024    £292.99
Apr 2024    £316.86

As @Firedog states the standing charge is set by the regulator (OFGEM) and not OVO and mine do match (or in some cases are slightly less than) the OFGEM maximum.

OFGEM ran a review of standing charges earlier this year, https://www.ofgem.gov.uk/publications/launch-review-standing-charges-energy-bills, but sadly you have missed the boat. The closing date for comments was 19th Jan.

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