What is Standing Charge (Energy)?

Full Definition

A standing charge is a fixed daily fee that gas and electricity suppliers add to every bill to cover the cost of supplying energy to a property -- including maintaining the network, meter reading and administration -- and it is charged whether or not any energy is actually used in that period. It sits alongside the unit rate (the price per kWh actually consumed) within the Ofgem price cap, and both figures are reviewed and typically updated every three months. As an illustration under the current price cap for a typical dual-fuel household paying by direct debit, the electricity standing charge is around 57p a day and the gas standing charge is around 29p a day, on top of unit rates of roughly 25p per kWh for electricity and 6p per kWh for gas -- combining to produce the published typical annual bill figure, though exact charges vary by region, supplier, meter type (including whether a household is on a prepayment meter) and payment method. Because the standing charge is fixed regardless of usage, very low-usage households -- such as those in small flats, second homes or with solar panels -- end up paying a proportionally larger share of their bill through the standing charge than high-usage households do, which has made the design of standing charges a recurring subject of Ofgem consultations and consumer debate.

Related Calculators

See Also