Saturday, 27 July 2013

All New Energy Tariffs Will Feature Daily "Standing Charges."

My contract with Scottish Power is "Online Fixed Price Energy November 2013". As the name suggests it ends at the end of October.

One of the good points of the tariff is the "no penalty" leaving clause, which means if I can find a better deal during the term of the contract, I can walk away without a fee.

Some of you may have read my previous piece on the length of time it takes to move to a new supplier and the exorbitant tariffs companies use once you're out of contract. Link to piece.
Anyway. I'm determined not to lose money this time when changing supplier.

In common with most consumers I've raged against the complicated tariff options offered by the big 6 energy suppliers.

It's incredibly difficult to compare the deals offered as one company offers lower unit prices, but charge a higher daily standing charge rate. They also charge a higher price for your initial energy usage each month with a lower price kicking in once that figure has been passed.
Unfortunately,I didn't realise how lucky I was with the old "complicated" system, until I got some quotes using the new system inspired by Ofgem.

I'm a low energy user and benefited from the two-tier system because I'm only paying Scottish Power for the energy I use. The "Online Fixed Price Energy November 2013" contract has NO standing charges.

Our friends (I use the term loosely) at Ofgem have now outlawed NO standing charge tariffs and replaced them with a flat rate for each unit of energy used combined with a daily standing charge.
My quote from Npower using their "September 2016" tariff was a massive 21% higher than I'm paying now. What was even worse was on an estimated annual bill of £941, the standing charge was £270.

You and I will be paying a similar standing charge for our energy in the future, however much you economise.
Forget about turning the thermostat down 1 degree. 
Forget about insulating your home and turning lights off. 
You'll be paying the standing charge, even if you're on holiday and the house is empty.

The new system MAY be simpler, but once again the consumer seems to be screwed by the very people who were supposed to be protecting their interests...OFGEM.

NB: I've written a further piece detailing the current tariffs available and how the standing charge affects the bill. Link to piece.

Twitter: (@solaricarus)

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