Energy: Standing Charges
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the impact of the current costs of energy standing charges on businesses in North Wales.
Answered by Martin McCluskey
The Government has not made such an assessment specific to North Wales. Levels of standing charges in the non-domestic market are a commercial decision for suppliers and are not regulated by Ofgem as they are in the domestic market.
Standing charges predominantly recover ‘fixed’ costs that do not vary by energy use. This includes supplier’s operational costs for serving each customer and the cost of essential network maintenance and upgrades, which are necessary to keep all consumers connected, minimise constraint costs, meet the capacity needed to deliver clean power by 2030, and help bring down bills for households and businesses for good.
We know that too much of the burden of the bill is placed on standing charges, and we are committed to ensuring that standing charges are fair to all consumers.
As part of this, Ofgem have launched a Cost Allocation and Recovery Review to consider how energy system costs can be recovered from consumers in a fairer and more efficient way and government will continue to engage closely with Ofgem on the work.
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