EDF Energy customers could save up to £676 on their energy bills over a two-year period after a daily fee has been scrapped.
Under new plans announced by energy regulator Ofgem, energy suppliers will be required to offer households “zero standing charge” tariffs, alongside existing ones, by next winter.
Some suppliers already offer low- or no-standing charge tariffs, but it is not universal, so Ofgem says more choice is needed to better support consumers. While these tariffs are at least 10% below the price cap they have a higher unit rate so they are more likely to benefit customers who use less energy.
The regulator said tens of thousands of consumers responded to its call for input on standing charges, with many calling for them to be scrapped altogether, saying this would make it easier to manage bills or pay back debt.
But Ofgem said it’s important for households to retain a choice of tariff so it says standing charges won’t be removed altogether, as those who use a lot of energy – often for medical and health reasons – would see their bills rise significantly.
As such, the regulator instead plans to mandate energy suppliers to offer zero standing charges tariffs alongside existing ones so that consumers have the opportunity to choose a tariff that suits them.
Standing charges are a fixed daily amount that is added to your energy bill by suppliers, regardless of how much energy you use and they cost the average dual fuel household £338 per year on average.
But under Ofgem’s plans, suppliers must offer zero standing charge tariffs to households, alongside other tariffs, by next winter. This means that if the charges were scrapped today, EDF Energy customers on a two-year fix would make a saving of up to £676.
The charges have been criticised as they disproportionately affect households that use less energy, as the fixed costs make up a higher proportion of their overall bill.
Tim Jarvis, director general of markets at Ofgem, said: “Many people feel very strongly that standing charges are unfair and prevent them from being able to manage their bills effectively.
“We want to give consumers the ability to make the choice that’s right for them without putting any one group of consumers at a disadvantage. And by having a zero standing charge tariff, we would create that choice for everyone.”
EDF has already slashed its standing charges by £100 with its new Simply Tracker Extra Apr26. As the tariff tracks Standard Variable prices, EDF says it will consistently undercut Ofgem’s price cap by £100, offering guaranteed savings of £50 per fuel, with the discount applied through standing charges.
The supplier says the discount is made possible because it buys energy in advance, taking the savings made on energy costs and applying them to standing charges to ensure everyone can benefit.
Rich Hughes, Director of Retail at EDF, said: “With our new tracker tariff, customers can rest assured that no matter what happens with energy prices over the next year, they will always save £100 against the price cap.
“By discounting standing charges, the tariff also ensures all customers benefit equally from predictable cost savings, while supporting those that are already taking steps to reduce their carbon footprint and improve energy efficiency.”
Existing customers can sign up to the tracker via their MyAccount online or on the EDF app, while new customers can sign up online. The tariff is available to new and existing customers on Direct Debit, Cash Cheque and Pay As You Go for a limited time only.
