To ask the Secretary of State for Energy Security and Net Zero, what steps his Department is taking to help ensure that standing charges for (a) electricity and (b) gas reflect actual service costs.
Answered on
7 January 2025
Although standing charges are a commercial matter for suppliers, and are regulated by Ofgem, we know that too much of the burden of the bill is placed on them. The Government has worked constructively with the regulator on the issue of standing charges, and we are committed to lowering the cost of them.
Standing charges recover the ‘fixed’ costs of the system, meaning costs that do not vary by energy use. This includes suppliers’ fixed operational costs of serving each customer, the cost of network upgrades and maintenance necessary to keep all consumers connected and fund the technologies to drive progress towards net zero targets. It also includes the cost of providing Warm Home Discount payments to eligible customers.