Select committee: Energy Security and Net Zero Committee
Recommendation 12
First Report - Preparing for the winter
Published 23 Sep 2023
Paragraph 46
Addressed to Department for Energy Security and Net Zero
Energy Security and Net Zero Committee Preparing for the winter All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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.
From: Energy Security and Net Zero Committee, First Report - Preparing for the winter (HC 1720), paragraph 46, 23 September 2023
Government response
The government responded to the whole report on 15 December 2023 (deadline 23 November 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government's response describes existing schemes and reforms across energy bill support, fuel poverty and consumer standards, does not intend to re-open the Energy Bills Support Scheme or its Alternative Funding, and says it will keep support under review.
- On households that missed out on the Energy Bills Support Scheme, the Government "does not have any plans to re-open the EBSS AF", and says it "will continue to closely monitor energy prices and keep energy support schemes under review".
- On the Warm Home Discount, it says it has extended the scheme to 2025/26 and reformed it to remove any "first come first served aspect", and it "continues to explore options to make the WHD more flexible".
- On standing charges, it says this is "a matter for Ofgem", notes Ofgem's call for input published on 16 November, and says removing the charge would create "distributional impacts". It will "work closely with Ofgem".
- On smart meters, it "has also committed to consult" on options to further incentivise or require smart meter installation for recipients of the Energy Company Obligation (phase 4) and the Great British Insulation Scheme. No date is stated.