British Gas has confirmed that customers will see a new line item on their April bills described as a ‘standing charge administration fee (standing)’, which the company says is necessary to cover the costs of maintaining charges that are not technically standing charges but fulfill a similar conceptual function.
The fee, set at £1.47 per day, will appear below the existing standing charge of £0.60 per day, which itself sits beneath last year’s ‘standing charge service charge’ of £0.89 per day. A British Gas spokesman said the new charge was designed to ensure customers could continue to enjoy the benefits of a transparent billing system in which every possible aspect of energy provision is itemised separately.
“We recognise that customers value clarity,” said Martin Henshaw, British Gas Director of Revenue Optimisation and Customer Value Extraction. “This new charge simply reflects the administrative burden of processing charges that exist independent of usage but are not classified as standing charges under the current regulatory framework. It stands to reason that such charges would incur their own standing cost.”
The announcement comes as Ofgem faces mounting pressure to address standing charges, which have risen by 247% since 2019 while the actual cost of keeping the lights on has remained stubbornly tied to how much energy customers use. Industry insiders suggest the regulator has been reluctant to intervene due to concerns that energy companies might respond by creating new categories of charges with different names.
These concerns now appear to have been well founded. British Gas literature describes the new fee as a ‘non-variable baseline cost recovery mechanism’, which the company insists is entirely distinct from a standing charge because it relates specifically to the infrastructure required to levy other non-variable charges rather than to the energy infrastructure itself.
“Think of it as a meta-charge,” Henshaw added. “You cannot have charges without the systems to administer those charges. Those systems cost money. We are simply asking customers to contribute toward the privilege of being billed accurately.”
The company has also announced that customers who pay by direct debit will be eligible for a £0.12 per day discount on the standing charge administration fee, provided they also sign up for paperless billing, agree to receive marketing communications, and successfully complete a monthly online form confirming they still wish to receive the discount. Customers who miss the form deadline will be enrolled automatically in British Gas’s ‘premium billing experience’, which costs £2.20 per day but includes the peace of mind that comes with knowing exactly how much they are paying for the right to be charged.
Rachel Dobson, an accountant from Stevenage who has been with British Gas for eleven years, said she initially assumed the new charge was an error. “I spent forty minutes on hold only to be told it was correct and that I should consider myself fortunate they are not yet charging separately for the phone call,” she said. “Though apparently that is under review for July.”