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nergy agency Ovo has joined requires power standing fees to be abolished for weak clients because it confirmed it won’t be passing on the most recent improve from October 1.
Ovo chief govt Raman Bhatia warned that households had been dealing with a protracted interval of excessive costs compounded by wider cost-of-living pressures that would depart hundreds of thousands struggling until pressing motion was taken.
The agency is looking for a social tariff to be in place by subsequent winter, focused at these clients who’re probably the most financially weak, and for the standing cost to be scrapped this winter for customers who want help within the meantime.
The standing cost is a set quantity of round £303 a yr that folks pay on their power invoice which doesn’t change based mostly on utilization.
Ofgem’s latest announcement that it was reducing the power worth cap by round £150 from October 1 additionally included the element that it was permitting standing fees to rise from 82p a day to 83p.
Ovo stated it could not be passing on the rise to clients.
The standing cost, which has risen from 74p a yr in the past, is used to pay for a lot of issues, together with the maintenance of the electrical energy and gasoline grids.
However, its critics say it’s an unfair system which supplies individuals much less management over their power payments.
It might imply a family which solely makes use of gasoline for heating their residence, and never for decent water or cooking, will nonetheless be charged throughout the summer time months when their heating is off.
Although such houses are uncommon, it might depart individuals with fees they don’t perceive and may do nothing about.
Earlier this yr, the boss of British Gas proprietor Centrica stated that the system penalises those that attempt to hold their power payments beneath management by decreasing how a lot gasoline and electrical energy they use.
Centrica chief govt Chris O’Shea stated the cost hit these had been cautious about their power use hardest, and people on prepayment meters might unknowingly construct up money owed over the hotter summer time months.
Octopus Energy chief govt Greg Jackson has additionally criticised the cost, arguing the price needs to be moved on to unit charges with additional help for low revenue or disabled clients, giving individuals extra management over their payments.
Mr Bhatia stated: “Energy bills are set to stay high despite the recent price cap reduction. This leaves many households with stretched finances struggling to pay. We are calling for a reform of the unpopular standing charge and a social tariff for the most financially vulnerable.
“Our own customer support package will provide immediate support to our customers who need it most right now. By working with partners like StepChange we can continue to directly help people facing hardship this winter and beyond.”
StepChange chief govt Vikki Brownridge stated: “This winter will continue to be challenging for households across the UK.
“Government must look at all options to deliver more to support consumers – particularly those on prepayment meters – ahead of another bleak winter. StepChange has long called for the implementation of a social tariff, which will help to shield the most vulnerable in our society from continued high energy costs.”
