EDF axes ‘regressive’ standing charges for vulnerable

EDF is reducing standing charges to pre-energy crisis levels for its most vulnerable customers this winter.

The daily standing charges on a household energy bill have increased by 107% on electric and 8.2% on gas for a direct debit customer since April 2021.

Philippe Commaret, EDF managing director for customers, said that it “is not right” that hard pressed households are hit with “regressive daily charges”.

He added: “Hard pressed households that cut back on their energy use to save money shouldn’t face their hard work being undone by these higher and regressive daily charges.

“The current system means those with smaller homes, who use less power, pay proportionately more. That is not right. And that’s why we’ve decided to roll back standing charges for at least 260,000 customers to their pre-crisis levels this winter.”

This financial support will be applied to eligible customers’ accounts as a £30 credit in December and means standing charges will effectively be an average of 56p instead of 87p per day, covering the period from January through to March. EDF estimates that this will cost the company around £7.5 million.

EDF’s announcement comes after the Net Zero Select Committee this week concluded in its Preparing for Winter inquiry that the current standing charge structure is “unfair and regressive” and “penalises those on lower incomes or who are actively reducing their energy usage”.

The supplier is also calling for Ofgem and government to review its approach to standing charges and other non-energy costs, reviewing where costs could be put into general taxation. And EDF is also calling on government to introduce a meaningful, government-funded social tariff for spring 2024.

“We are calling on Ofgem and Government to review the distribution of costs between unit rates, standing charges and even general taxation,” Commaret added. “Many costs could potentially be better collected through other means, that also better support net zero. We cannot afford to offer this support unilaterally indefinitely, which is why we a calling for a review.

“Vulnerable customers also need a new social tariff to provide long-term, targeted support for those 6.6 million people living in fuel poverty. Two years of energy crisis have demonstrated the urgency to ensure clean, secure and affordable energy for Britain’s homes and businesses for the long term.”