South Tyneside households pay hundreds of pounds in extra charges on their energy bills
South Tyneside households are paying hundreds of pounds a year on top of their energy bills, due to their network supplier's standing charges, a new analysis shows.
Anti-poverty campaigners say the fees, which vary by almost £100 across the country, are a sign of Britain’s “broken” energy system, and warned high bills meant many customers will be “dreading the onset of winter”.
A standing charge is a fixed daily fee added to household gas and electricity bills by the network operator, regardless of energy consumption. It covers the cost of supplying the property with gas and electricity and is collected on behalf of the network companies in charge of the pipes and wires.
This charge varies significantly between regions, resulting in higher energy bills for households in some parts of Great Britain.
The cost is determined by Ofgem, the regulatory authority, and the distribution network operator, responsible for maintaining the network in the region.
The new Warm This Winter Tariff Watch Report, produced by analysts from Future Energy Associates, has revealed charges can vary by as much as £95, depending on the region.
The figures show South Tyneside households pay an annual standing charge of £321.53, which includes £108.73 for gas and £212.79 for electricity. This means Northern Electric – the network operator for the area – charges £69.95 more a year than the cheapest current standing cost across Great Britain, which is £251.58 for areas covered by the London provider.
This brings the total annual energy bill of an average South Tyneside household to £1,860.
A spokesperson for the Warm This Winter campaign, said many people were living with an unfair “postcode lottery”.
“The Government needs to wake up to the fact that energy is now unaffordable for millions of households and act to bring down bills this winter and permanently,” they added.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Britain's broken energy system means that some people are being priced out of being able to keep themselves warm because of these unjust regional variations in costs.”
He added: “As households look on at the unfairness of energy bills, which are still at record levels, people will be dreading the onset of winter.”
An Ofgem spokesperson said the standing charge is covered by the energy price cap, and some suppliers do not apply one.
They added: “In the coming weeks we will be launching a call for input into standing charges, and will ask consumer groups, charities, suppliers, and customer representatives for feedback on what they see, so we can find the right balance for customers.
“It remains a complex issue with a recent impact study showed that moving costs from the standing charge to a higher unit rate would result in winners and losers – and could be particularly damaging for the most vulnerable consumers.
“This includes those who are unable to reduce their energy usage because of age, disability or reliance on medical equipment.”
A Department for Energy Security and Net Zero spokesperson said: “We spent nearly £40 billion to cover around half a typical household’s energy bill last winter and additional help is available for the most vulnerable this winter through an increase to the Warm Home Discount, from which we expect over 3 million households to benefit.
“We continue to monitor the situation and will keep options under review, including with respect to the most vulnerable households.”