Citizens Advice published its response to Ofgem's consultation on introducing a zero standing charge energy price cap variant on 4 April 2025. The consumer body said it does not support the proposals, pointing to what it described as significant complexity and implementation challenges, and to risks that some households would be worse off1.
The response argues that the proposed consumer journey is unclear, because households would be asked to choose between default tariffs at a stage where a fixed product is likely to be more beneficial. It warns that poor tariff choices could leave consumers worse off with limited means of putting this right if a ban on switching is also introduced, and that poor understanding of standing charges could create risks of mis-selling1.
Citizens Advice identifies particular risks for some consumers in vulnerable circumstances, including those with medical needs requiring higher energy usage and prepay consumers, because fixed costs would be recovered through higher unit rates under some variants. It also says some options are likely to exclude electricity-only customers from any benefit, including those on traditional electric heating who are often in the deepest fuel poverty, and that options such as Rising Block Tariffs are not feasible for non-smart meter customers1.
"We do not support the proposals contained within the consultation, given their significant complexity and implementation challenges."
The response notes that zero standing charge tariffs already exist in the market but have low take up, and that Ofgem attributes this to them offering little or no cost savings. Citizens Advice said it is unconvinced, on the case put forward in the consultation, that sufficient consumer demand exists for a zero standing charge default tariff designed to recover fixed costs, and asked Ofgem to provide a more compelling evidence base before taking the work forward1. It also raised concerns that the changes counteract the need for tariff innovation and increased consumer flexibility under the Clean Power 2030 plan, and could increase overall system costs1.
Why it matters for households
A standing charge is the fixed daily amount paid whatever energy is used, and it is the part of the bill that a zero standing charge variant would move into unit rates. For a household, that shifts the balance of the bill towards consumption: lower users would pay less in fixed terms, while higher users, including those who need more energy for medical reasons or who use electricity for heating, would pay more per unit1. The response states that fixed costs recovered through unit rates are what makes some vulnerable consumers more prone to harm under some variants1.
The proposals sit within the price cap framework, and the response questions whether a default zero standing charge tariff would attract enough demand to work as intended1. The wider question of how fixed costs are recovered, and whether existing no standing charge tariffs offer real savings, remains unresolved on the evidence set out1.
What happens next
Citizens Advice has asked Ofgem to provide a more compelling evidence base before taking the work forward, and encourages the regulator to focus on minimising fixed costs in the energy system and on its longer term project considering alternative ways of recovering fixed costs that may be fairer1. No timetable for Ofgem's next steps is given in the response.