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What is best standing charge or no standing charge for electricity


Is a no standing charge tariff cheaper than an energy tariff with standing charge?

Here are some examples of energy bills. One with a standing charge, and one without a standing charge.

Assuming you are an average energy consumer, you would use around 16500 KWH of gas, and 3300 KWH of electricity. These examples are based on this energy consumption.

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Tariff with standing charge

Gas

Standing charge, 22.57 pence per day

Charge per KWH, 3.708 pence

365 days @ 26.706 = £97.48

16500 KWH @ 3.708 = £611.82

VAT @ 5% = £35.47

Total £744.77

 

Tariff with no standing charge

Gas

Units tier 1,  7.345 pence for the first 2680 KWH

Units tier 2,  3.708 pence for the remaining KWH

2680 KWH @ 7.345 = £196.85

13820 KWH @ 3.708 = £512.45

VAT @ 5% = £35.47

Total £744.77

As you can see, there is no difference between the two. Electricity would be much the same, other than it being charged at a higher rate. The only way you would benefit from the no standing charge option, would be if you consume less than 2680 KWH of gas per year!

When you get quotes from a comparison site, you don’t need to put any thought into this. The comparison site will take all the different options into consideration. Your cheapest energy deal will be shown whether or not it has a no standing charge option. All the charges are included in the quotations.

You can see a good example of this when you get quotations. You will see that Scottish Power offer the two options with many of their tariffs. You will also see that they charge the same total price for each one!

To ensure you don’t make any mistakes when switching your energy supplier, you should check the following pages:

About this example

This example is not based on any particular tariff. It has been put together, just to let you see that there is not really a difference between the two options.

3 Comments

  • JAMES (#)
    March 21st, 2013

    I am being charged standing charges of £1.36 per day for gas and £0.90 for electricity. Is this legal. I own a shop and the tennant left on 1st Jan 2013,the bills were always quarterly, now I find out that the energy providers have switched the bills to monthly, sent the bills to the wrong address, and now want interest and late payment fees over £100,and by rights the bills should not be due until end of march. please advise

    • Martin Ramsey (#)
      March 22nd, 2013

      Hi James
      Your standing charges do appear to be on the high side. This is not illegal. The problem with business energy contracts, is that you only have a small window of opportunity to switch your supplier when your discounted tariff comes to an end. If you don’t do anything about it within that window, you will roll onto a more expensive tariff.
      If your bills have been addressed incorrectly, then you should contact your supplier to remove the additional charges.
      Could you get back to me with the end date of your current contract, I will then be able to assist you with finding a cheaper energy deal.

      Kind regards

      Martin Ramsey

  • JAMES (#)
    March 23rd, 2013

    Thanks for that Martin, The property had been leased for 15 years, I, as owner only became responsible for the property on 1st Jan 2013. I am presently trying to upgrade the property to hopefully sell or relet it. As I’m now over 65 I’d much rather sell it and stop the hastle. Thanks again for your help
    yours, James

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