Recommendation 12

The current standing charge structure is unfair and regressive and penalises those on lower incomes or who are actively reducing their energy usage. The Government should engage with Ofgem to: • revise the standing charge model and replace it with a rising block tariff (also known as a consumption-based tariff) based on per unit cost, which would correlate costs with how much energy a household uses; • make clear to consumers the breakdown of the standing charge between network costs, operational costs and policy costs; and • remove operational costs from the standing charge, as these should be borne solely in consumer bills. Suitable mitigations should be adopted to ensure that high-need vulnerable groups are not penalised by the removal of a standing charge.