Energy sector leaders have expressed skepticism regarding Ofgem’s recent proposals to reform standing charges for electricity. These plans, announced in September, would require all energy suppliers in England, Scotland, and Wales to offer at least one tariff that features lower standing charges, with higher costs for energy consumed.
During a session with the Energy Security and Net Zero Committee, top executives from major energy companies raised concerns about the potential impact on consumers. Some suggested eliminating standing charges entirely, while others worried that the new approach could exacerbate existing issues.
Rachel Fletcher, a director at Octopus Energy, noted that many complaints about standing charges stem from consumers struggling to afford their energy bills. Fletcher emphasized that Ofgem’s direction may not resolve underlying issues and could potentially worsen the situation for customers. The executives highlighted that high energy costs remain a significant challenge, and consumers might make unsuitable choices without adequate understanding of the new tariff structures.
A call for a social tariff was voiced during the hearing, aimed at providing discounts for low-income households. The organization Energy UK has also recently advocated for sustained government support for those with outstanding bills. Current statistics reveal that the debt owed to energy suppliers by customers has risen to a record high of £4.4 billion, with over one million households lacking repayment arrangements.
Additionally, Energy Secretary Ed Miliband indicated that shifting financial responsibilities, such as green levies from electricity to gas bills, is a consideration to lower household energy costs. He clarified that while this approach is under review, any changes must be equitable and not negatively affect consumers’ budgets.
The Climate Change Committee has recommended separating policy costs from electricity bills to assist consumers in transitioning to greener energy options, although any shifts would require careful execution to ensure fairness across different consumer groups.
Source: https://www.bbc.com/news/articles/cvgdwn20771o?at_medium=RSS&at_campaign=rss