Energy: Standing Charges

The Government knows that, for many consumers, too much of the burden of the bill is placed on standing charges. We are committed to lowering the cost of standing charges and are working constructively with Ofgem, on this issue. Ofgem have conducted a broad public consultation to understand the views of consumers on this issue, receiving over 5,000 responses on their 2024 discussion paper. Since then, Ofgem have been continuing work in two areas.

Firstly, Ofgem have been working to ensure that domestic consumers can choose tariffs with low or no standing charges. Ofgem took a further step towards this goal on 24th July, announcing proposals to require suppliers to offer their customers low or no standing charge tariffs from early 2026. You can read about this here: https://www.ofgem.gov.uk/policy/standing-charges-energy-price-cap-variant-next-steps.

Secondly, Ofgem have been reviewing how ‘fixed’ costs, which tend to be funded through standing charges, should be recovered in the future energy system. This includes whether those fixed costs could be recovered in more progressive ways, and we are working closely with the regulator on this.