A potential cut to the daily charge that everybody pays for their gas and electricity supply could offer hope to those struggling with rocketing bills. The standing charge element is added to all bills - regardless of how much energy is used.
The energy regulator, Ofgem, is looking at possibly cutting the standing charge. It comes as bills look set to rise again in October with the energy cap set to rise by another £830 from £1,971 to £2,800 for the average household.
Ofgem's chief executive Jonathan Brearley said the charge would be reviewed, reports BirminghamLive. The standing charge is a daily basic charge that is applied to all bills.
In April, it rocketed from 25p a day to 45p for electricity, while households now pay 27p a day for gas. The hike on electricity meant that households are now paying £164 a year before they use any power, up from £91.
For those with both fuels, the basic annual charge is now £262 before any consumption. Customers then pay a unit rate for the energy used - this is 7p per kWh for gas and 28p per unit of electricity.
Billpayers were furious about the hike in April, and said they were confused over what the standing charge covered. But Mr Brearley told BBC Breakfast 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.
