Anger over standing charges hikes

A GROWING number of small businesses are complaining of vastly inflated standing charges on top of their standard energy bills, some as much as 13 times the level of three years ago.

The Federation of Small Businesses (FSB) has written to Ofgem, urging it to act over fastgrowing standing charges paid by small companies, particularly those in rural areas.

One business owner got in touch with the group to report an increased standing charge, from 70.94p per day in July 2021 to 969.64p per day in September 2023, more than 13 times higher.

Standing charges are applied daily, regardless of how much energy the customer uses, and are used to cover the cost of supplying energy to homes and businesses.

They also cover keeping the power on when energy suppliers go bust.

While consumers’ bills are limited by the energy price cap, small businesses’ are not.

Tina McKenzie, FSB policy chairwoman, said: “We want Ofgem to do a thorough review of standing charges for businesses as well as consumers, for better transparency and to discern whether energy companies are behaving fairly towards their small firm clients.”

An Ofgem spokesman said: “We’re assessing the standing charge system overall, including tackling issues faced by non-domestic consumers.

“We’re grateful for FSB for responding to our consultation and we’re looking at its ideas.

“We agree too many businesses get unexplained price hikes from suppliers or are ripped off by brokers – that’s why we’re putting tough new rules in place from July to resolve disputes and get greater clarity on fees.”