Energy: Standing Charges

(asked on 14th April 2022) - View Source

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

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the impact of business failures in the energy sector on the amount of standing charge paid by consumers.


Answered by
Greg Hands Portrait
Greg Hands
Minister of State (Department for Business and Trade)
This question was answered on 21st April 2022

Costs incurred when customers are moved to a new supplier from a failed supplier are split between the receiving supplier and a levy on industry as a whole. The levy compensates suppliers for the unrecoverable costs of taking on customers, such as purchasing additional wholesale energy.

The standing charge element of consumer bills reflects some of the fixed costs of supplying energy, including gas and electricity system costs. In the April-October calculation of the price cap, Ofgem increased the distribution cost allowance due to the increased industry levy caused by exceptional global wholesale energy prices.

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