Energy Bills ‘Lower’ Charges Plan to Include British Gas, Octopus, E.ON
Plans are in motion to decrease energy bill charges for millions of customers, including those with British Gas, E.ON, and Octopus. The proposal aims to lower the standing charge on energy bills, offering relief to households with lower energy consumption. Martin Lewis has previously criticized the standing charge, arguing that it is unfair to apply it universally, even when overall energy prices drop. This standing charge is a daily fee paid by all energy users for network maintenance and energy provision, separate from the usage-based charges.
The Government, specifically Energy Minister Miatta Fahnbulleh, expressed commitment to reducing standing charges by collaborating with regulators. One approach outlined in Ofgem’s discussion paper includes shifting supplier operational costs from standing charges to unit rates, increasing tariff variety for consumers, and reviewing the allocation of system costs in the long term. The goal is to ensure that standing charges are decreased to alleviate financial burden on consumers.
- Average energy bills are set to increase from £1,568 to £1,717 annually with the new price cap effective from October, impacting both the standing charge and unit price.
- Martin Lewis has advocated for reducing the standing charge, which is set to rise for electricity from 60.12 pence to 60.99 pence per day and for gas from 31.41 pence to 31.66 pence per day.
- The reduction in energy rates may only result in around £100 savings over six winter months for households with typical usage, while cutbacks in pensioner energy support exacerbate financial strain for many.
Pensioners, in particular, face challenges as specific financial assistance and winter fuel payments have been reduced or means-tested, potentially leaving many without crucial support. The adjustments in standing charges and energy bill rates aim to alleviate these financial pressures on consumers, especially those with lower energy consumption levels.