Asked by: Mick Whitley (Labour - Birkenhead)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether she has made an assessment of the level of daily standing charges for (a) gas and (b) electricity in (i) North Wales and (ii) Merseyside.
Answered by Amanda Solloway - Government Whip, Lord Commissioner of HM Treasury
Standing charges are regulated by Ofgem. Regional standing charges may be found online at www.ofgem.gov.uk/information-consumers/energy-advice-households/get-energy-price-cap-standing-charges-and-unit-rates-region .
The main factor determining differences in standing charges is the cost of operating and maintaining the gas and electricity networks in each region.
Asked by: Mick Whitley (Labour - Birkenhead)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether her Department has made an assessment of the potential impact of regional variations in (a) energy costs and (b) daily standing charges for (i) electricity and (ii) gas on regional economic inequalities.
Answered by Amanda Solloway - Government Whip, Lord Commissioner of HM Treasury
Standing charges are a commercial matter for suppliers, although Ofgem regulates standing charges as they do with other elements of billing. This includes setting a cap on standing charges as part of the overall default tariff cap.
The variance in standing charges is partially due to regional differences in energy distribution costs. These costs reflect the expenses of maintaining and upgrading the distribution network in a specific area, and the number of consumers those costs are spread across.
Ofgem launched a call for input on standing charges, which closed on Friday 19 January 2024, looking at how it is applied to energy bills and what alternatives could be considered.
Asked by: Mick Whitley (Labour - Birkenhead)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether her Department has had discussions with energy suppliers on taking steps to reduce the daily standing charges for gas and electricity in (a) North Wales and (b) Merseyside to at least the national average.
Answered by Amanda Solloway - Government Whip, Lord Commissioner of HM Treasury
The regulation of standing charges is a matter for Ofgem. The cost of distributing electricity varies regionally, mirroring differences in distribution expenses across the country. These disparities stem from maintaining and upgrading distribution networks in specific areas and the number of consumers sharing these costs. Consequently, less densely populated and remote regions incur higher operational expenses.
Ofgem launched a call for input on standing charges, which closed in January 2024, looking at how they are applied to energy bills and what alternatives could be considered. I am supportive of Ofgem’s decision to gather information and evidence on the current standing charge model. Ofgem are currently assessing the responses received and will publish a decision in due course here: www.ofgem.gov.uk/publications/launch-review-standing-charges-energy-bills.
Asked by: Mick Whitley (Labour - Birkenhead)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, pursuant to the Answer of 12 February 2024 to Question 13068 on Energy: Standing Charges, whether her Department has had discussions with Ofgem on the equitability of daily standing charges for gas and electricity in (a) North Wales and (b) Merseyside.
Answered by Amanda Solloway - Government Whip, Lord Commissioner of HM Treasury
I regularly meet with Ofgem to discuss the energy retail market, including standing charges. Ofgem’s recent Call for Input (CfI) on standing charges closed on January 19th 2024. Ofgem are considering the responses they received and are thinking about next steps.
Network charges vary by region to reflect the different costs of supplying consumers in each region. In 2015, Ofgem carried out an assessment of moving away from regional charging and the assessment showed that it would risk an increase in overall costs and reduce accountability to the customers being served.