1. Standing charges and tariffs
‘Standing charges’ are fixed charges which must be paid regardless of how much fuel you use. Suppliers make these charges to cover costs such as billing, meter reading, customer services, servicing meters and so on.
A ‘tariff‘ is the package of charges and conditions that a supplier offers you for providing electricity, gas or both.
All tariffs are structured in the same way and comprise a standing charge and a unit rate (or rates, for time of use tariffs). Note that although the structure of all tariffs is the same, suppliers can choose to offer tariffs where the standing charge is set at zero.
Every tariff has a specific name. It’s important to know the name of your tariff, particularly if you want to shop around for a better deal. The name of your tariff is shown on your bill and on your annual statement. Your supplier must tell you, via your fuel bill and other communications, whether it has a cheaper tariff available and how much you could save by switching to it.
All suppliers should provide a ‘tariff information label’ which details the key terms and conditions for each tariff. Suppliers are not permitted to increase prices on, or make other changes to, fixed-term tariffs without your consent, though structured price increases that have been set out in advance and that comply with consumer protection law are allowed. The following exemptions also apply:
•an increase in price due to an increase/reduction in VAT;
•your payment method is changed because of your debt and/or failure to comply with contractual terms.
If you are on a fixed-term contract that is coming to an end, your supplier cannot roll you forward onto another fixed-term contract without your consent. Your supplier will give you a six-week period before your contract is due to end to decide about your preferred tariff and supplier. Standard Licence Condition 22C concerns fixed-term contracts.