Industry bosses and experts are calling for standing charges to be reduced, accusing them of being far too high.
It comes after the boss of British Gas owner Centrica said the system actively punishes those who try to drive down their energy bills by reducing how much gas and electricity they use. The standing charge is a fixed amount that people pay on their energy bill and does not change based on a household's usage.
Similarly, money-saving expert Martin Lewis labelled the current standing charge of £300 a year a 'moral hazard' and has called for it to be reduced. Standing charges are used to pay for a variety of things such as the upkeep of the electricity and gas grids, but critics say the system is unfair and gives people less control over their energy bills.
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Writing on Twitter, Mr Lewis said: "The high energy standing (daily) charges are a moral hazard and should be reduced. It is outrageous that people have to pay £300/yr just for the facility of having gas & electricity even if they use none."
He added: "Keeping the standing charge high means lower users can save proportionately less and less by reducing usage - that disempowers them. I have long campaigned for lower standing charges. MSE is submitting a consultation on this about shifting some of the cost the the unit rates.
"The reason Ofgem mandates firms to have high standing charges in the price cap is because they use it to pay for the 'fixed costs' of energy (distribution, transmission etc) - which it believes should be mostly shared equally. It is especially loaded onto the electricity standing charge as that is 'more universal'."
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Centrica Boss Chris O'Shea similarly said those who attempt to save the most are being hit the 'hardest' due to the standing charge. He told the Sun newspaper: "The standing charge hits those who are careful about their energy use hardest – and these are often people from low-income households and prepayment meter customers.
"I know from conversations with prepayment customers that the standing charge can see them unknowingly build up debts over the warmer summer months.”
Mr Lewis suggested: "I think a more progressive split would be better, by putting a bigger proportion of the cost on the unit rate. And in past polls I've done on here the huge majority agree.
"One stumbling block is the argument from Citizens Advice, an organisation I have great respect for. Its concern is that if you shift the burden, some vulnerable people with disabilities and medical issues that make them high users will suffer.
"Of course the correct solution to that is lower the standing charge but give them separate support. Yet that would involve an energy market that wasn't broken and the regulator and government to operate in concert.
"So we're in a chicken and egg situation. Still on balance I think the fair thing to do is lower the standing charge (and campaign for help for the high using vulnerable at the same time). Yet I wanted to bash this out quickly as I saw much debate on it after my earlier tweets, and I wanted to explain some of the bigger picture."
