Ofgem has announced plans to include tariffs with zero standing charge under its price cap regime.
The regulator said although some suppliers offer low- or no-standing charge tariffs, it is not universal, and Ofgem believes more choice is needed for all consumers, including those in debt. It said “tens of thousands of consumers” had responded to a call for input on standing charges. Many had asked for standing charges to be removed altogether, saying that reducing or removing standing charges would make it easier for them to manage their bills or pay back debt. However standing charge fixed costs would be included within unit rates and Ofgem said that may see significant bill increases for very vulnerable consumers who are high users of energy, often to meet medical and health needs. The regulator said “it is important that consumers have the ability to make the right choice for their own circumstances”.
Tim Jarvis, Director General Markets at Ofgem, said: “Many people feel very strongly that standing charges are unfair and prevent them from being able to manage their bills effectively.
“We want to give consumers the ability to make the choice that’s right for them without putting any one group of consumers at a disadvantage. And by having a zero standing charge tariff, we would create that choice for everyone.”