Guides · Pricing

Standing charges explained

Utilities Made Simple · 5 minute read

Every business energy bill has two prices: the unit rate (pence per kWh you use) and the standing charge (pence per day, whether you use anything or not). The standing charge covers the fixed costs of your connection — network maintenance, metering, and a share of industry levies — and on gas contracts especially, it's a genuine decision point.

Why standing charges vary so much

Two factors dominate: your region (network costs differ across Britain's distribution areas) and your meter type (a half-hourly supply costs more to settle than a small NHH one). Suppliers also balance the two prices against each other — a low unit rate with a high standing charge and vice versa can cost identical money at one usage level and very different money at another.

Standing charge vs no standing charge

Some gas contracts offer a "no standing charge" structure: the daily fee disappears and the cost moves into a higher unit rate, sometimes tiered so the first block of consumption each day is dearer.

Structure	Tends to win when…
With standing charge	Usage is steady and reasonably high all year — the daily fee is spread across many kWh
No standing charge	Usage is low or strongly seasonal — premises closed for months, holiday businesses, part-time sites

The crossover point is pure arithmetic on your annual kWh — it should be calculated, never guessed. When we quote gas we cost both structures against your actual usage and show the total annual figure for each.

The trap to avoid

Comparing contracts on unit rate alone. A renewal letter shouting a low pence-per-kWh can hide a standing charge several times higher than the market. Always compare total annual cost: (unit rate × annual kWh) + (standing charge × 365).