Ofgem: ‘Cost of standing charge to be reviewed’

Ofgem chief has said the regulator is looking at whether the cost can be reduced

Ofgem will look at whether the cost of the standing charge could be cut.

Standing charge is the cost that is applied to energy bills automatically before any gas or electricity is used.

Jonathan Brearley, Chief Executive of the energy regulator told BBC Breakfast: “We are looking at the way that standing charge is made up and we are looking at components of it to see potentially if it can be reduced.

“The reason it is there is it pays for the network infrastructure that supports us and gets energy to our homes. Things are not simple because you take the cost away from there we put it onto the unit cost.

“I talk to families for example with disabled children who have huge energy bills. And if we put that onto the volume charge, so the price per unit, their energy bills go up.”

Last month, Ofgem predicted the cap on household energy bills will rise to about £2,800 in October.

Mr Brearley explained that Ofgem was trying to get the balance for customers.

He added: “But these circumstances are extreme – they are extremely difficult for households to manage. What we need to do is to make sure people pay as fairer price as we can for their energy and make sure, ultimately that we manage through this as best we can.”

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