Hey everyone,
I’ve sent my response to Ofgem this evening regarding their consultation on requiring suppliers to offer a lower standing charge tariff.
As always, I’m inviting you to get involved and let Ofgem know your thoughts. If you agree with what I say, you can copy and paste my response below and send it to Ofgem. If you disagree with any of the answers I’ve given, please do edit it and make it your own, or write your own response from scratch. The most important thing is that we all get involved and give Ofgem our thoughts.
Responding to Ofgem
If you want more information on what this consultation is about, here is a link to my article and a link to Ofgem’s consultation page.
Article: Breaking: Ofgem to Require Energy Suppliers to Offer Low Standing Charge Tariffs
Consultation page: Requirement to offer lower standing charge tariffs
To get involved, here’s everything you need.
Response Deadline: 23:59 on 22 October 2025
Email to: standingcharges@ofgem.gov.uk
CC: Richard@TheRegulatorGuy.co.uk
Subject: Responding to Requirement to Offer Low Standing Charge Tariffs Consultation
The letter I sent:
Good afternoon Retail Pricing Strategy Team,
Thank you for the opportunity to give my thoughts on the requirement to offer lower standing charge tariffs consultation.
It goes without saying that standing charges are a contentious issue at the moment, and the fear that these charges are going to be ever increasing is a real concern to many low usage and vulnerable households.
Please see my responses to your questions below, I hope they are taken into consideration and actioned.
Questions and Answers
Question 1: What are your views on our updated case for change on lower standing charge options?
I agree with the perception of consumers, that high standing charges unfairly penalise low-usage households on energy bills. I agree with Ofgem’s decision to require suppliers to offer a lower standing charge tariff, but I think Ofgem should still be considering a zero standing charge price cap alternative.
As per your own feedback, 62% of people think that standing charges are unfair, that is a large majority. Ofgem should be taking that statistic seriously and doing more than just telling the suppliers they have to come up with fixed rate low standing charge tariffs. I think you should be enforcing a price cap alternative that gives freedom to low usage households to have a low standing charge option without having to fix for an extended period of time.
Question 2: Do you agree with our policy objectives and intent for requiring lower standing charge tariffs?
Yes, I agree with the policy objectives.
Question 3: Do you agree with our proposal to require suppliers to offer a tariff with a standing charge £150 below the nil consumption price cap level? Do you have any views on whether we should require a higher reduction?
No, I do not agree with this metric for measuring the standing charge reduction. I disagree both that the amount of reduction is enough and that a fixed reduction is the way to go.
Standing charges are just over £320 per year in the current price cap, and they are predicted to almost double by 2030. Having £150 reduction is standing charges today is not even half of the standing charge cost today, and doesn’t even reduce standing charges to 2020 levels. I think a larger reduction should be oered, closer to 75% of the standing charge cost.
I also think a percentage (my recommendation is 75%) should be used to calculate how much reduction the suppliers should give each price cap period. This way you ensure that consumers are always able to see a reasonable reduction in their standing charges.
If you keep it at a blanket £150 and standing charges end up doubling over the next 5-6 years, customers on the low standing charge tariffs would still be paying around £500 in standing charges in 2031, which wouldn’t even amount to a 25% reduction in standing charges.
Question 4: Do you agree with our proposal to require tariffs to be offered to all payment types and both smart and traditional meter customers?
Yes, this is the fairest way for this proposal to be offered. You should ensure that suppliers do not try to force customers onto smart meters by only making these tariffs available to smart meters.
Question 5: Do you agree with our proposal to allow suppliers to limit eligibility for lower standing charge tariffs to consumers that meet a minimum consumption threshold?
Yes, but this has to be done fairly. I agree that empty second properties shouldn’t be allowed to benefit from the lower standing charges, but you also have to balance the risk of accidentally cutting of the lowest-usage properties. So reasonable thresholds need to carefully curated. It is worth noting that only around 1% of properties in the UK are empty second homes.
Question 6: Do you have views on the methodology for setting a minimum consumption threshold?
No, I do not agree with all of the proposed options. Option 1 is the most reasonable I would say, but it adds layers of difficulty – what if the usage of a household is less than 3 months of an annual average for gas but more electricity? It’ll be more complex and needs some safeguards, but this is the best suggestion.
Option 2 suggests taking out the bottom 20% of households, whilst only the bottom 1% are second homes. That means those that could benefit the most from the reduced standing charges are the ones who will miss out.
Option 3 is definitely a no-go. Suppliers have proven time and time again that they cannot be trusted to do what is best for customers (involuntary PPM scandal, unstable financing practices, falling customer service standards whilst profits increase, power stations threatening to switch o, ECO falsifications, etc), I do not think that leaving this up to suppliers is wise.
Question 7: Do you agree that the license conditions should include a threshold for suppliers to be eligible? If yes, would 50,000 domestic customers be a suitable threshold?
Yes, this seems reasonable.
Question 8: Do you agree that the license conditions be time limited? If yes, would a 2-year period be suitable?
No, I think this should stay in place until we are in a position that energy bills are back to pre-crisis levels, i.e. set a price cap threshold of around £1,100-£1,200, if the cap falls below that figure then suppliers do not have to offer the reduced standing charge tariffs for that cap period.
Question 9: Do you have any further evidence on the overall costs of implementing taris that meet the new requirement and any ongoing compliance costs?
No.
Question 10: Tell us about your views on our consumer protection approach and compliance considerations.
NA
Question 11: Do you have any views on our proposed principles for reasonable pricing for these tariffs?
I do not agree with Ofgem “reserving the right to carry out reviews of suppliers’ assessments of compliance with the principle of ‘reasonable’ tariff pricing.” – I think this should be mandated. I think suppliers should have to prove, each quarter, that they are oering reasonable prices for the unit rates of their tariffs. I also think there should be a strict cap, that stops the low standing charge tariffs from being priced above the price cap level for an average medium usage household, this will ensure customers are protected. Suppliers will still profit from these taris as they are fixed rate tariffs, meaning they will know the usage of the consumer and can hedge the purchasing of wholesale energy.
If you have any questions on the above, or would like to see the anonymised results of the survey, including the comments given, please contact me at Richard@TheRegulatorGuy.co.uk.
Kind Regards,
Richard Winstone
The Regulator Guy.
Don’t forget, you have to send your reply by midnight on 22 October 2025, so make sure you get it sent soon. And please remember to CC me into the email, helps me keep track of how many response Ofgem have received for a particular consultation.
Thanks all,
Richard Winstone
The Regulator Guy.
