Energy firms are charging a staggeringly wide range of prices to cover supposedly fixed costs, new Which? research has revealed.
We found 75 different standing charges available to just one customer – varying annually by £266 for gas and £136 for electricity.
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So what exactly is a standing charge?
Many energy firms say standing charges cover fixed costs such as bills, meters and government environmental schemes.
But then why do some suppliers offer such different standing charges to the same customer?
We looked at all the deals on the market available to a customer with standard meters based in the West Midlands last month.
The biggest differences in annual standing charges within the same company were:
- £0 to £184 on both the gas and electricity parts of Scottish Power dual fuel deals
- £0 to £100 on Scottish Power’s gas tariffs
- £0 to £136 on Npower electricity tariffs.
Scottish Power says some of its standing charges also include extras like boiler cover. While Npower says it does not claim the standing charge covers fixed costs, adding its range gives customers choice.
Check out our energy tariffs explained guide to learn more about how your bills are calculated.
Energy pricing shake-up
Ofgem is reforming the energy market so all firms must only offer a maximum of four tariffs per fuel, comprising a standing charge – which can be zero – and one unit rate.
But Which? believes this is not enough and wants single unit pricing for energy – similar to that of petrol – to stop the standing charge lottery so customers can compare prices at a glance.
Tariffs with the highest standing charges are not necessarily the worst deal. Low-use customers are likely to be worse off with a high standing charge, while heavier users might find them a better deal.
But with the single unit price put forward by Which?, the best tariff would be the best – regardless of how much gas and electricity you used.
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