What Does Standing Charges Mean?
Standing charges are fixed amounts applied to gas and electricity bills, regardless of usage. These charges help the supplier cover fixed costs, such as the provision of a meter and connection to the network. A portion of standing charges also go toward covering government initiatives to reduce carbon emissions.
Safeopedia Explains Standing Charges
Some energy plans do not include standing charges; however, an energy plan with standing charges is often less expensive than one without.
The What and Why of Standing Charges
Standing charges are applied to cover the charges that the supplier bears to provide gas and electricity to a property. This includes:
- Use and maintenance of the energy network, pipes, wires, and other infrastructure that transport gas and electricity to homes and businesses
- Keeping units connected to the energy network
- Taking meter readings
- Contributing toward government initiatives that help underprivileged households
- Regulating CO2 emissions
Standing charges are generally fixed at a flat daily rate, but the rate can vary greatly depending on the type of energy, supplier, and location of the unit supplied. The payable amount also depends on whether it is a single-fuel or dual-fuel tariff.
Gas and Electricity Standing Charges
As per the UK's Energy Price Guarantee, the average electricity standard charge from 1 October 2022 is 46p a day, and for gas it is 28p a day. The standing charges a year for both have risen to £273 from £263, which is excluding charges for energy usage.
Typical consumption is taken as a 2- to 3-bedroom household utilizing 12,000 kilowatt hours (kWh) of gas and 2900 kWh of electricity per annum.
Standing charges are applicable whether it is through monthly bill payments, prepayments or smart meters. The charges may be lower with a smart meter than a standard meter because it involves less administrative work for suppliers.