Any support on the forum for a zero standing charge plan?


Userlevel 3
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I wonder whether OVO have looked into the feasibility of offering a zero standing charge plan?

We're in the position where our electricity standing charges in a given period are almost equal to what we pay for our units. We're fairly low electricity users anway, plus we generate our own electricity from solar panels. We'd save quite a bit of money each year by switching to a company like EBICO (who have a zero standing charge tariff), but we'd be sad to leave OVO.

Do any other forum users think a zero standing charge plan would be useful?

11 replies

Userlevel 7
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Pete632 wrote:

Do any other forum users think a zero standing charge plan would be useful?



Good question - what do you think: @andyfras @Steveo @buzzhunter @EverythingNeedsAUserName @BrizzleLass @Gizmo :?

Tim
Userlevel 6
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I know a rival company do a free economy 7 hours tariff in return for a higher daytime standing charge, that would be a nice option :)
Userlevel 3
A standing charge ensures that the underlying costs of providing a supply to the property are covered.

Charging purely for consumption encourages lower use (by sensible users). But if everyone went for it, the unit price would have to be quite high to compensate. The infrastructure needs to be paid for and continually updated and improved.

Personally, as I have solar panels and economy seven, a zero standing charge would be worth investigating. But it would it be fair? Would it only be taken up by those who benefit from being lucky enough to afford solar panels, good insulation and the ability to research such alternatives and make sense of them? If it were available I'd be looking to install solar water heating as well. A dilemma.
Userlevel 1
Yes, I agree there should be no standing charge. There isn't for petrol when you fill your tank! But if that means the cost per unit goes up by, say, 2.5% - you have the option of saving that by turning down the heating a bit, a few lights off etc; good for your balance and good for the environment. However there is no way you can make a saving r/e the standing charge.

But in an ideal world customers should have the dual option - ether no s/c and higher unit costs, or a higher s/c but lower unit costs so maybe those with large families using a lot of power won't lose out.
Userlevel 7
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I've been puzzled why OVO doesn't offer a tariff with no Standing Charge. It would seem to favour smaller properties and customers who are struggling to make ends meet. As such it would seem to be in keeping with the higher ethical standards which OVO espouses.

I can understand that the profits for OVO might be lower for those accounts in the first year, but equally, they are likely to remain loyal customers in the future. So perhaps a 2-year or 3-year option might be a possibility.

If OVO wanted to, they could try out such a tariff with those who are already on the Priority Services Register. I suspect many there are experiencing Fuel Poverty (usually defined as spending 10% or more on domestic energy).
Userlevel 6
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Hey all,

A standing charge is a daily fixed charge that goes towards the cost of supplying energy to your address. It includes the cost of the pipes and power lines, and maintenance of your meters. You pay your standing charge no matter how much energy you use – even if you have a smart meter.

Because we use a standing charge, we don’t have to use structured unit prices like other suppliers do. We believe our way is honest, transparent and much simpler.

If we were to stop showing the unit price and standing charge separately, we'd need to incorporate the cost of supplying energy to your properties into the unit rate instead, which I can imagine would result in a higher unit price being offered!

Lucy
Y
Lucy_OVO wrote:



If we were to stop showing the unit price and standing charge separately, we'd need to Incorporate the cost of supplying energy to your properties into the unit rate instead, which I can imagine would result in a higher unit price being offered!

Lucy



Yes but the point is you could offer the option. It's not that challenging - pay this price with a standing charge, and this (higher) price without a standing charge. Give the customer the choice...
Userlevel 6
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All fair points there @Stuart_Treehouse. Energy suppliers across the board are limited to offering four core tariffs for both gas and electricity. Alongside this, in 2014, Ofgem banned complex tiered tariffs and introduced a new tariff structure - a unit rate and a standing charge to make tariffs easier to compare.

Hope this helps!
Userlevel 7
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Ah, thanks @Lucy_OVO, I'd forgotten about that Ofcom directive to restrict Suppliers to just four main tariffs.

This is going to need some rethinking once serious numbers of users start having SMETS2 Smart Meters installed. There are some really nifty features which lend themselves to some interesting new tariff structures.

Amongst the more interesting SMETS2 capabilities for electricity meters are

1. Time Of Use bands; The day is split into 48 half-hour segments, each of which can be assigned different prices for import/export. Users can decide when to draw power, but it will cost more in peak periods, and there can be "special offers" notified to customers on days when lots of renewable generation is expected.

2. Load limiting; Power can be restricted (or even cut) once prearranged current levels are exceeded. No longer do we have to worry about blowing the main 100A fuse if our EV is on a boost charge and we simultaneously turn on an electric shower drawing a further 45A!

3. Load limiting threshold; The meter can send a warning notification if the user crosses a prearranged power limit. So a customer can be informed if the usage for that day/week/month is likely to exceed a self-imposed threshold. This will assist those households on limited budgets to live within their means instead of going into debt.

4. Control over connected "smart" devices. A Smart washing machine can be programmed to start the wash cycle only once the cost per kWh is below a certain figure. Unlike the present Economy-7 tariff, this threshold might be met mid-morning on a sunny day with lots of solar generation occurring locally.

The days are coming to an end when we will visit a comparison site once a year and choose the best tariff on offer.
Userlevel 6
Badge +2
Pete632 wrote:

I wonder whether OVO have looked into the feasibility of offering a zero standing charge plan?

We're in the position where our electricity standing charges in a given period are almost equal to what we pay for our units. We're fairly low electricity users anway, plus we generate our own electricity from solar panels. We'd save quite a bit of money each year by switching to a company like EBICO (who have a zero standing charge tariff), but we'd be sad to leave OVO.

Do any other forum users think a zero standing charge plan would be useful?



Hello Pete, a note of caution about EBico, if you use gas do be careful, they have some of the highest prices on the energy market. :(
Userlevel 7
Badge +1
We've been comparing UK and Australian energy rates over on this thread.

Have a look at the scanned bills from Don Mudiford and you'll see that the Australian company Simply Energy applies a Standing Charge. However you can pretty well eliminate it by being in credit and paying promptly.

And @Bumblebee, Ebico is favoured by people renovating properties. Their energy use is negligible so they don't mind a high cost-per-unit so long as there's no Standing Charge. So there's a good reason for that tariff being offered.
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