Introducing a zero standing charge energy price cap variant

Closed 20 Mar 2025

Opened 20 Feb 2025

Contact

standingcharges@ofgem.gov.uk

Feedback updated 24 Jul 2025

We asked

We asked for feedback on a new zero standing charge option within the energy price cap.

You said

We received responses from 51 organisations, including 15 from suppliers, 28 from charities and consumer groups and 8 from industry bodies. There were also over 10,000 responses from organised consumer campaigns and over 250 individual consumer responses.

Respondents generally supported giving consumers more flexibility and control, with consumer groups especially valuing a zero standing charge option for low-usage households.

However, concerns were raised about adding complexity, implementation challenges, and the need for transparent, fair cost allocation. Suppliers emphasised financial risks and called for evidence-based tariff modelling to guide future decisions.

View our summary of responses (PDF, 240.4 KB) for more details about what organisations said in response to our consultation.

We did

We are looking at introducing a requirement that energy suppliers must offer at least one lower standing charge offer. This should be available at all times and in all regions of the UK. It is subject to consultation and if implemented, the change would come into effect by January 2026.

We believe this approach will allow consumers to access more flexible and transparent pricing options quicker. It will also give suppliers the freedom to design tariffs that best meet their customers' needs.

Read about our next steps on the standing charges energy price cap variant.

Published responses

View submitted responses where consent has been given to publish the response.

Overview

We are seeking views on a new zero standing charge option within the energy price cap which will give household bill payers more choice in the energy market.

Who should respond

We would like to hear from energy suppliers and consumer groups. We would also like to hear from industry groups and network companies.

Background

In August 2024, we asked for feedback on options to reduce household standing charges. We found that many consumers wanted us to reduce, significantly change or remove standing charges entirely.

Many of these consumers shared that they would prefer to pay for their energy based only on use (unit rates) rather than also paying a standing charge. In general, they wanted more choice and control over how they pay for their energy costs.

We are looking to create a zero standing charge option that allows consumers to choose how they contribute to these costs. In our consultation, we explain the different ways this could work and other details, such as how consumers might get onto the tariff.

Why your views matter

Your feedback will help us understand how this new variant could work, if the proposed tariff options are suitable or whether alternative options should be considered. If implemented, consumers could choose to opt into it from next winter.

What happens next

This consultation has now closed. We will analyse the responses we have received which help inform our next steps.

Audiences

  • Consumer groups
  • Electricity suppliers
  • Energy industry employees
  • Gas suppliers
  • Government
  • Household bill payer
  • Policy

Interests

  • Energy price cap