A standing charge is a fixed daily fee on an energy bill that covers the cost of supplying gas or electricity to a property, regardless of how much energy is used. It is charged every day, even when consumption is zero.
In one line: A standing charge is the fixed daily cost of being connected to the gas or electricity network, separate from the energy actually used.
How a standing charge works
The standing charge pays for maintaining the network, meter operation and supplier overheads. It applies per fuel and per day, so a dual-fuel home pays two separate standing charges that appear as fixed lines on the bill before any usage is counted.
Suppose electricity carries a standing charge of 60p a day and gas 30p a day. Across a 90-day quarter that is 54 GBP for electricity and 27 GBP for gas, totalling 81 GBP of fixed cost before a single unit of energy is added.
Ofgem sets a maximum standing charge within the price cap, reviewed each quarter, so the daily amount a supplier can levy on a standard tariff is capped rather than unlimited.
Standing charge vs unit rate
The standing charge is fixed and does not move with consumption, while the unit rate is charged only on each kilowatt hour used. A low-usage household pays proportionally more in standing charges than a high-usage one.
Both elements sit under the price cap, but they are capped separately, so comparing tariffs means weighing the daily standing charge against the per-unit price together.
Primary source: Ofgem: Energy price cap