The standing charge is to cover fixed costs, maintenance and repair to the network, smart meter roll out, meter readers, green levies etc and most recently covering lost credit for failed suppliers. This should always be spread equally across all customers, it's the correct and fairest way to do it, it's completely irrelevant hoe much or how little gas or electricity you use, that's purely down to each individuals choice, heavy users should not be used to subsidise others purely because they use more.
Thats all well and good when you start to realise how horrid it is.
Lets say e.g. you decide its not worth paying the SC for gas and ask for it to be disconnected as some people have done, then the gas infrastructure people turn up later decided to do a full disconnection from the street when the request was merely to disconnect from the meter (I assume they do this as they paranoid about people tapping the supply), and then there is a 4 figure cost pushed onto the consumer, so the SC is effectively a protection racket. Also there is an argument to be made that the higher the usage then the higher the wear and tear on the network, and hence heavier users create more maintenance demand. I also think the arguments I have seen regarding the failed suppliers shouldnt be paid for by the SC are valid as well.
Spread equal as a fixed rate or a % of the bill? Debatable and I dont think we going to be all agreeing, but what I do think, is an ever increasing fixed cost is a dangerous game to play and wrong. These costs need to be scrutinised more (I suspect Ofgem doesnt scrutinise enough), and alternative forms of funding should be considered not to mention, the credit balances of customers should most definitely not be funded by everyone else if a supplier goes bust, these need to be held in a protected way, even Ofgem has now admitted they got this wrong. The revenue from the SC amounts to billions annually currently,
I would love to see the breakdown of where its spent. I expect some fancy accounting to elevate maintenance costs.
We know e.g. there is 28 million consumer energy accounts. If we assume average of 50p day (some will be on old fixed deals so lowered this from 80p). T
hen it is around 4.8 billion in revenue (after VAT is removed). Things like the WHD are only in the 10s of millions so a very small % of this.
It cant be assumed this can always go up and up and up and up to cover whatever costs, it wont be sustainable.
Will the possible 1 billion handout to Octopus be added to the SC as well? We pay for a company to buy another?
Remember back to October last year, the SC went up then before any companies even went bust, SC is not meant to be affected by wholesale cost of energy so how did that happen?