A major overhaul of standing charges could reduce energy bills for households around the UK.
With energy bills set to rise in October, many will feel the pinch but the standing charge element of the bills could be cut as energy regulator Ofgem explores new rules.
The standing charge is a cost that is applied automatically to energy bills before any gas or electricity is used and the charge for electric soared by 25p to 45p a day in April. Households now pay 27p a day for gas, BirminghamLive reports.
READ MORE- Why petrol and diesel are so expensive right now prices soar again
The standing charge adds a cost to energy bills even if you switch off everything.
If customers use zero energy, they still face a bill of around £260-a-year and then pay a unit rate on top for the energy used - this is 7p per kWh for gas and 28p per unit of electricity.
But now, as the energy cap is expected to increase to an eye watering £2,800 in October, Chief executive Jonathan Brearley said the charge would be reviewed.
This comes as the next hike could see households bills go up by a further £830 - on top of the £693 rise that we saw in April.
Speaking on BBC Breakfast, Mr Brearley said that Ofgem could potentially cut the charge - meaning some customers could pay less on their bills.
He said: "One thing we are doing is looking at how that standing charge is made up. We are looking at components of it to see, potentially, if it can be reduced."
He said Ofgem was looking into how it could ensure households paid a "fair" price for their energy bills.
