Electricity standing charge “postcode lottery” needs to end as North Wales residents pay most in UK

Alyn and Deeside MS, Jack Sargeant, raised concerns with the First Minister, Mark Drakeford, about the clear disparity in electricity standing charges between North Wales and London.

On average, a household in North Wales pays £82 more each year than one in London, drawing criticism for what many see as an unfair “postcode lottery” in energy pricing.

A standing charge is a fixed daily amount households pay for energy, no matter how much they use. It’s added to most gas and electricity bills.

North Wales and Mersey face the highest average costs in Great Britain.

Fixed daily charges in North Wales are over £120 more per year than those in the East Midlands.

Since the price cap was introduced in 2020, standing charges for households in North Wales have increased by almost two-thirds, significantly impacting low-income and vulnerable households.

Energy standing charges in North Wales and Mersey are higher due to a combination of factors, such as regional variations in network costs, regional distribution network operators’ (DNO) charges, and historical differences in supply and infrastructure.

DNOs are responsible for managing the regional energy distribution networks.

They charge suppliers for using their infrastructure to deliver electricity and gas to households.

These charges can differ between regions due to various factors such as population density, terrain, and the age of the network infrastructure.

As a result, higher DNO charges in North Wales and Mersey can contribute to increased standing charges for consumers in these areas.

The topic was discussed during Tuesday’s Welsh Parliament session.

Mark Drakeford agreed with Mr Sargeant’s points, criticising the unfair nature of the charges. He assured that the Minister for Social Justice will address this matter in upcoming meetings.

He said: “It is simply not right that an average household in north Wales pays £82 each year more in standing charges than an equivalent household in London.”

“The regressive postcode lottery of standing charges needs to end, and the Minister for Social Justice will press that case again in her next meeting with the latest UK Minister.”

Grasping the seriousness of the issue, Jack Sargeant said, “…people in my community pay the highest standing charges for electricity in the UK.”

He challenged the UK Government about these differences, spotlighting the rising energy debt crisis in the area.

Mr Sargeant highlighted the risks of energy debt and its potential to push households onto prepayment meters, echoing scandals from past years.

He asked the First Minister for a pledge to ensure residents in Flintshire, and all over Wales, can access top-quality advice to avoid such predicaments.

Responding, the First Minister commended Mr Sargeant’s commitment to the cause and mentioned a recent report from the House of Commons.

This report, by the Energy Security and Net Zero Committee, labelled the current standing charge system as “unfair and regressive.”

The committee also suggested that energy firms must offer advice and invest in advisory services to support those struggling during winter months.

Mark Isherwood, North Wales Conservative MS and Chair of the Senedd’s Cross Party Group on Fuel Poverty and Energy Efficiency, joined the discussion.

He remarked: “There’s a notable regional difference in energy costs. North Wales and Mersey have the highest charges in Great Britain.”

“Households here might pay over £380 each year in standing charges before even using any energy.”

“Meanwhile, London boasts the lowest average rates, with standing charges at £299.”

Mr Isherwood asked for details on steps taken in talks with the energy regulator, Ofgem.

Mark Drakeford acknowledged regular dialogues with Ofgem and voiced his unhappiness with their early reactions.