Decisions about standing charges are a commercial matter for energy suppliers. The standing charge is a fixed charge that suppliers pass on to their customers to cover the cost of providing a live supply. The standing charge and unit rates are subject to the maximum permitted under the Ofgem price cap. The standing charge is passed on to consumers as a flat rate per day, rather than as a percentage charge, based on how much energy they use.
Standing charges are charges that suppliers pass on to their customers, a significant element of which is the cost of the electricity and gas transmission and distribution networks. As it costs more to distribute electricity to some regions than others, there are regional variations in standing charges to reflect higher costs to serve.
The standing charge includes the costs energy suppliers incur to provide a live supply of gas and electricity to individual properties, regardless of how much energy their customers use. If it was removed, these costs would be added to the unit price of energy. Otherwise, suppliers would not be able to recover the legitimate costs of serving customers.