Fifers pay hundreds of £s more for energy due to high standing charges

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Fife households are paying hundreds of pounds a year on top of their energy bills, due to their network supplier's standing charges, a new analysis shows.

Anti-poverty campaigners say the fees, which vary by almost £100 across the country, are a sign of Britain’s “broken” energy system, and warned high bills meant many customers will be “dreading the onset of winter”.

A standing charge is a fixed daily fee added to household gas and electricity bills by the network operator, regardless of energy consumption. It covers the cost of supplying the property with gas and electricity and is collected on behalf of the network companies in charge of the pipes and wires.

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This charge varies significantly between regions. The cost is determined by Ofgem, the regulatory authority, and the distribution network operator, responsible for maintaining the network in the region.

Aly woman looks at her gas bill as both she and her husband sit in front of their gas fire keeping warm in the cold (Pic: TSPL)Aly woman looks at her gas bill as both she and her husband sit in front of their gas fire keeping warm in the cold (Pic: TSPL)
Aly woman looks at her gas bill as both she and her husband sit in front of their gas fire keeping warm in the cold (Pic: TSPL)

The new ‘Warm This Winter Tariff Watch Report’, produced by analysts from Future Energy Associates, has revealed charges can vary by as much as £95. There are two different network operators in Fife, meaning costs vary between different areas of the local authority.

The figures show the maximum standing annual charge in Fife is £338.68, which includes £108.73 for gas and £229.95 for electricity. This means Scottish Power – the operator with the highest standing charge in the area – fixed a price of £87.10 more a year than the cheapest standing cost across Great Britain, which is £251.58 for areas covered by London Electricity.

This brings the total annual energy bill for households covered by Scottish Power to £1,888.

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The cheapest standing charge in the area is £329 for households covered by Scottish Hydro-Electric. However, the operator set higher tariffs for gas and electricity, so those paying the lower charge are subject to a higher annual energy bill – £1,896.

A spokesperson for the Warm This Winter campaign, said many people were living with an unfair “postcode lottery”.

“The Government needs to wake up to the fact that energy is now unaffordable for millions of households and act to bring down bills this winter and permanently,” they added.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Britain's broken energy system means that some people are being priced out of being able to keep themselves warm because of these unjust regional variations in costs.”

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He added: “As households look on at the unfairness of energy bills, which are still at record levels, people will be dreading the onset of winter.”

An Ofgem spokesperson said the standing charge is covered by the energy price cap, and some suppliers do not apply one.

They added: “In the coming weeks we will be launching a call for input into standing charges, and will ask consumer groups, charities, suppliers, and customer representatives for feedback on what they see, so we can find the right balance for customers.

“It remains a complex issue with a recent impact study showed that moving costs from the standing charge to a higher unit rate would result in winners and losers – and could be particularly damaging for the most vulnerable consumers.

“This includes those who are unable to reduce their energy usage because of age, disability or reliance on medical equipment.”