How is your energy standing charge calculated?
Energy standing charges vary massively and our handy guide explains exactly what a standing charge is and what it pays for.
What is a standing charge?
Energy bills are made up of two different groups of charges:
- the commodity cost i.e. the actual cost of the gas or electricity consumed
- non-commodity costs – these are all charges that originate from the government and third parties such as distribution companies.
Standing charges include a range of ‘non-commodity costs’. The standing charge is a fixed daily amount that you must pay whether you are actually consuming energy or not. The standing charge includes a contribution towards:
- using and maintaining the energy networks, wires and pipes that carry gas and electricity across the country to your meter
- keeping your meter connected to the energy network
- payments towards government initiatives such as helping vulnerable households and reducing CO2 emissions.
What else can affect my standing charge?
Who your supplier is, where in the country your meter is located and what type of meter it is will also have an impact on the standing charge. There is no regulated definition of what should be included in the standing charge rather than in the unit rate, so suppliers calculate standing charges in different ways. For example, our electricity supplier EDF also includes the following elements in their standing charges:
- Cost to serve
- Distribution Use of System (DUoS)
- Renewable Obligations (RO).
Why can my standing charge change when you renew my contract?
Our energy portfolio was previously split across a number of different suppliers, however this year we have begun consolidating the portfolio to a single supplier for electricity and a single supplier for gas. As each supplier’s method of calculating standing charges can be different, you may see a difference in these charges when compared to previous bills.