The standing charge on energy bills could soon be lowered providing relief to households who use less energy.
Martin Lewis has previously criticised Ofgem for increasing the standing charge even when the overall energy price cap came down, such as when bills dropped in April.
Conservative MP Claire Coutinho asked the Government what plans there are to reduce the standing charge.
The daily fee is paid by all energy users for general maintenance of the network and provision of their energy, separate from the per unit amount they pay for their actual usage.
An increasing standing charge while the per unit price comes down means people who use less energy benefit less from the drop in energy bill.
Energy minister Miatta Fahnbulleh said in response: “The Government has worked constructively with the regulator on the issue of standing charges, and we are committed to lowering the cost of them.
“Ofgem’s recently published discussion paper sets out the options for how standing charges could be reduced, including by moving supplier operational costs off standing charges onto the unit rate, increasing the variety of tariffs available for consumer in the market, and in the longer term, reviewing how system costs are allocated.
“We will continue to support Ofgem in this work and ensure that standing charges are reduced.”
Average energy bills will increase from £1,568 a year to £1,717 a year as the new price cap comes in from October, with both the standing charge and unit price to increase.
Martin Lewis has previously branded the standing charge “morally hazardous” and has called for the charge to be cut.
From October, the standing charge will increase for electricity from 60.12 pence a day to 60.99 pence a day.
The standing charge for gas will go up from 31.41 pence a day to 31.66 pence a day.
Mr Lewis has also previously warned that many pensioners will again face difficult pressure on their budgets due to high energy bills.
The financial journalist explained: “While energy will cost less than during last winter’s crisis time, the reduction in rates only equates to a drop of roughly £100 over the six winter months for a household with typical usage.
“Yet specific pensioner energy support has dropped by far more…Last year pensioner homes got up to £300 extra per household cost of living support – that’s gone, and its loss alone is far bigger than the saving made by slightly lower rates.
“Piling on top of that is the Governments new decision to means-test Winter Fuel Payments, that will leave all except usually those who claim Pension Credit missing out on a further £200 – £300.”
