Electricity Bills: The Surprise Twist We’re All Watching
Standing Charges: The Silent Culprit
- What’s a standing charge? A fixed daily fee you pay, no matter how much or how little you light up your office.
- Market cap? Households only. Business customers are still trying to figure out why their rates keep climbing.
- Shock factor: Up to 12× growth. Today’s tech start‑up in the Highlands is paying £7.50 a day – that’s an extra £2,500 a year on a 12‑fold hike.
Real‑world Tales of Rising Costs
- Auto‑parts shop in Dorset was charged a modest 70p a day in July 2021. Two years later, it’s a staggering £9.69!
- Small‑firm tech HQ sees its standing charge climb from 32p to £7.50.
Where’s the Money Going?
Energy suppliers quote “operational costs” to justify the increase. Sure, metering and customer support matter, but so does advertising, brand merchandising, and the romance of office coffee. A big chunk also comes from the Supplier of Last Resort (SOLR) cost – basically a fancy way of saying “we’re paying to pick up failing suppliers.”
FSB’s Call for Clarity
- Show us the breakup – disclose every third‑party commission.
- Cut SOLR fees that only boost larger suppliers’ profits.
- Collaborate with Ofgem to balance rural vs. urban charge gaps.
Why This Matters to Small Businesses
Every extra pence counts when your margins already feel like they’re on a tightrope. The FSB’s latest Small Business Index says utilities are #1 in cost‑pressure complaints: 62.5% of firms blame them for rising expenses.
Final Word from FSB’s National Chair
“Energy suppliers have to explain the sudden, dramatic hikes in standing charges that turn small businesses into a lazy customer‑pay‑all‑the‑time model,” says Martin McTague.
“Even though wholesale prices have dipped since 2022’s peak, the bills are still sky‑high. Meanwhile, the ‘green’ portion of the charge is shrouded in mystery, leaving small firms paying the price with no guidance.”
“Opaque standing charges will keep businesses choking on their own bills. We need a transparent system so the market can compete, and so small firms know exactly what they’re paying for.”
