‘High charges are huge’: Octopus boss slams rising costs charged with delivering gas and electricity to homes
- Greg Jackson says ‘way too much cost’ was charged on permanent fee
- They are capped at 46.36pa day for electricity from October 1
- That’s up from 25p earlier in the year
The Octopus Energy boss described the “high charges” being placed on household gas and electricity bills as “enormous”.
Greg Jackson states that “far too many costs have been passed on to ongoing charges – from network and distribution charges to failing providers”.
The rise in permanent royalties has been a controversial topic since the start of the energy crisis.
This is a fixed daily amount on the energy bills to be paid and which covers the cost of supplying households with gas and electricity.
Take a stand: Octopus boss Greg Jackson says ‘far too many costs’ have been loaded onto the permanent load element of an energy bill
Even if usage is limited, that permanent charge remains the same, making it “more difficult for time-pressed customers to save money through efficiency,” according to Jackson.
Octopus has now entered a “battle against permanent charges”, as part of a £40m package.
All customers on its standard variable tariff – Flexible Octopus – will automatically benefit from a 4% reduction in subscription fees compared to Ofgem’s price cap.
Typical on-going charges range from 5p to 60p per day for electricity and 10p to 80p per day for gas.
The average daily rate for dual-energy customers paying by direct debit will be 46.36p for electricity and 28.49p for gas, including tax, from 1 October.
Earlier in the year this was 25p for electricity and 26p for gas. In July, an energy campaign group called for the abolition of permanent charges on electricity and gas bills altogether.
Fuel Poverty Action said in July that more than 80% of people supported abolishing permanent charges.
The charity also wrote to industry regulator Ofgem, saying the extra charge was a “grotesque injustice”.
Ruth London of Fuel Poverty Action said: ‘It is unfair to put more and more burden on the part of the bill that no one can avoid, no matter how little energy they use.
“Permanent Load is a killer for people who have cut their energy use to the bone but still face heavy daily loads.”
Since then, new Prime Minister Liz Truss has revealed measures that will cap energy bills at typical use at £2,500 a year from October 1, including the permanent load cap mentioned above.
Bills will be frozen at this level for two years as part of the energy price guarantee.
Octopus says the 100,000 most needy customers will also be able to apply for “permanent leave” of up to six months. This, he says, will allow them to benefit more from energy savings.
It says the £40million is diverted from operational efficiency and by reducing advertising and sponsorship.
Mr Jackson adds: “This £40million package is the start of our battle to bring them [standing charges] down.’