Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what information his Department holds on the purpose of the daily standing charge on energy bills; and if he will make an assessment of the recent increases in those charges by (a) E-ON and (b) other energy suppliers..

The standing charge is a daily flat rate that E.ON and other suppliers charge their customers to cover the cost of providing a live supply regardless of how much energy they use. It includes charges from network companies for using pipes and power lines to carry gas and electricity supplies, the maintenance and installation of meters, billing and accounting. A small proportion of the standing charge also goes towards Government initiatives that help vulnerable households and reduce carbon emissions. Ofgem requires energy suppliers to separate out the standing charge from a tariff’s energy unit rate so consumers can see what the different charges amount to.

For millions of households the level of standing charge is protected by the energy price cap rate set by Ofgem. While the setting of tariffs is a commercial matter for individual supply companies, the energy unit rate and the standing charge together for a supplier’s default and standard variable tariffs must not exceed the level of the price cap. For consumers looking for a new fixed deal for their energy, suppliers can offer a range of tariffs including some with a low or even a zero standing charge and a higher energy unit rate to attract low energy users.