Consumer Scotland responds to Ofgem consultation on lower standing charge tariffs

Consumer Scotland has responded to an Ofgem consultation on rules that would require energy suppliers to offer at least one lower standing charge tariff, in a response published on 4 November 2025¹. The statutory body for consumers in Scotland said it agrees with making the requirement temporary in the first instance, so its impact can be assessed before a decision on whether to continue¹.

Under the proposal, "energy suppliers must offer their customers at least one lower standing charge tariff option"¹. Consumer Scotland said a review in two years would allow the policy to be analysed alongside "significant expected increases in network costs from 2026" and any changes arising from Ofgem's Cost Allocation and Recovery Review (CARR)¹. It said it was therefore appropriate to include a sunset clause¹.

The body said it considers the CARR a better vehicle for deciding how different cost categories are recovered and from whom, and that narrow changes to tariff structures would redistribute costs "in a disorganised way"¹. It also raised the risk of systematic cost under-recovery, warning that this could mean more costs being recovered from consumers on standard tariffs¹. Ofgem has rejected cross-subsidisation in relation to previously proposed zero standing charge price cap variants, on the grounds that it would raise questions of fairness for consumers¹. Consumer Scotland asked Ofgem for clarity on whether it considers cross-subsidisation permissible under the current proposals, and how it will monitor and prevent consumers on standard tariffs bearing costs arising from under-recovery¹.

On consumer information, Consumer Scotland said the inputs used to compare tariffs become more important with low or zero standing charge options, and that using monthly or quarterly consumption data may give a misleading picture¹. It cited existing licence conditions, including 25 and 31F, intended to support informed decision-making, and recommended Ofgem consider whether further guidance or obligations are needed for suppliers and price comparison services¹.

Why it matters for households

Standing charges are the fixed daily amount paid for gas and electricity regardless of how much is used, and they form part of the recent rise in energy bills¹. The consultation concerns a requirement on suppliers to offer at least one tariff with a lower standing charge, which would change how fixed costs are recovered from households¹. Consumer Scotland's concern is that some consumers could gain while others are left worse off, and that the redistribution could happen in a disorganised way¹. Its response focuses on how any change would be assessed and whether consumers on standard tariffs could end up carrying costs not recovered from those on lower standing charge deals¹. The body also notes that comparing tariffs using summer usage alone may point consumers towards a low standing charge tariff when a full year's consumption would give a different answer¹.

What happens next

Consumer Scotland has recommended that Ofgem set out early indicators of what "success" looks like, so that a continue or discontinue decision can be made transparently in two years¹. It has also asked Ofgem to clarify its position on cross-subsidisation under the proposals, and how it will monitor and prevent under-recovery of fixed costs from lower standing charge tariffs¹. Ofgem's decision on the proposed rules has not been reported in the response¹.