Skip to main content

Ovo increased their electricity standing charge massively in April. I have asked them to itemise what the Standing Charge covers and then justify the increase - they are refusing to do this.

The Standing Charge should relate to the actual cost that Ovo has delivering electricity to your home. Those costs did not substantially increase in April.

Wholesale gas price rises meant that the unit cost of electricity went up but that should not have affected the Standing Charge.

Ovo have just taken the maximum that Ofgem allow the Standing Charge to be decided to charge it.

You can try to avoid unit costs by cutting back on usage, but you cannot avoid the Standing Charge.

Customers need to band together and get them to justify the increase.

Purely to add more context for energy price rises, although the Russia/Ukraine war resulted in a reduction in the availability of gas, a gas shortage was already going to be an issue in 2020. Asian companies were fast ramping up their energy use and there was going to be a shortfall in LNG supplies in 2020 anyway except that Covid put a big damper on that and it delayed the inevitable shortage until 2022 which is why prices went totally crazy that year. Had we not had Covid rises would have been steadier and not peaked so high but energy costs would have ended up roughly where they are today anyway.

 

We think that we are living in an era of high energy prices when in fact, pre-2020, we were living at a time of exceptionally low energy prices and we just got used to that. From that perspective it therefore makes sense that none of the analysts think energy prices are going to drop significantly in the next decade. The only possible exception is going to be oil because of a gradual worldwide increase in renewable energy production but that effect is currently small but increasing.

 

Peter

 


and unfortunately due to 14 years of the last set of halfwits we had more of a reliance on Gas than just about anywhere else, as they didn’t want to upset their mainly old vote demographic who tend to be climate change deniers and utter nimbys 


@fancyabrew I’d rather not bring politics in to this because it isn’t necessary but up to 2010 we had a very high reliance on coal and oil and it was only since 2012 that we started reducing these and have now totally removed them from our generation stack. If your memory goes back to the 1990s we were called the ‘Dirty man of Europe’ because the sulfur (used to be spelled sulphur) that came out of our coal burning power stations were killing the forests in northern and eastern Europe.

 

Peter

 


Thank you @Jeffus for alleviating some of my anger on this issue…

I've been out of the UK for five years and although I was expecting much higher energy bills the standing charge has been a massive shock to me.

I dug out an old bill from back then.  In 2018 I was with SSE/Swalec and living in the same area as now.  My standing charges were:

2018 Elec 15.66p/day  ~ 2024  61.06p/day  ~ up 300%

2018 Gas  18.26p/day  ~ 2024  30.30p/day  ~ up 66%

My ratio of total unit costs to total standing costs were:

2018 Elec  2 to 1  ~  2024  1 to 1

2018 Gas  2 to 1  ~  2024  1 to 4

Just to reiterate that last figure, currently for every £1 I spend on gas unit costs I spend £4 on gas standing charges. Both 2018 and 2024 figures were taken in October.

Clearly I live alone (and am very energy efficient).  I was very angry at this increase which is effectively a tax on single people.  It also makes a mockery of green initiatives:  What's the point of being frugal when 80% of your gas bill is fixed?  Just throw open your windows and pollute, pollute, pollute.

 

Just to further add a few facts that people can throw at each other 😉 SSE/Swalec also included a costs breakdown on my 2018 bill:

41% Buying the energy (clearly a Unit Cost)

28% Delivering energy to homes (clearly Standing Chg)

12% Govt overheads/schemes (clearly Standing Chg)

8%  Billing, Cust Service, IT (clearly Standing Chg)

5%  VAT 

6%  Profit

If anything, I'd say from the above figures that maybe the standing charge was artificially low back in 2018.

 

I still think it's pretty shocking that standing charges have increased so much given that fixed costs have fallen over the last ten years, since:

- Increasing online management of accounts have allowed companies to slash customer services, and

- Increasing use of Smart meters no longer requires armies of meter readers.

 

 


Oops…

The ratios given above are correct, but I think in 2018 I had a gas cooker, whereas now I have an electric cooker... so these ratios are not strictly comparable.


Hey @hypatia 

 

I can understand your shock, standing charges & unit rates have increased significantly. 

 

I can see that Peter E has already given a really helpful explanation here. Just wanted to add this topic which has some really helpful explanations & a healthy debate:

 

 


Reply