Our April price reduction has received lots of positive feedback from our customers, as well as some good questions. The letter we sent about our price decrease explains that we've increased our standing charges and decreased our unit charges (the price you pay per kWh of electricity you use) across all UK regions, and we have been asked the following things that we'd really like to clarify:

Why has my standing charge increased so much more than the unit charge has decreased? How does this mean a decrease in my bill overall?

Here's a brief example of how this might work our for a standard rate customer in the North West:

As the standing charge is calculated per day, an increase of about 3.3p per day adds up to around about an extra £12 annually [3.3p x 365 days].

The unit charge has decreased by a smaller amount, but is added up over thousands of units. If this customer uses around 2,950kWh per year, this is a £47.79 decrease over the whole year (1.62p increase x 2,950kWh used over the year).

This particular bill would therefore decrease by around £36 annually [£47.79 usage decrease - £12 standing charge increase] - or about 7.5%.

As a green electricity provider, why haven't you reduced the standing charge and increased the unit charge in order to  encourage customers to use less energy?

First and foremost, we believe it's important to price our electricity transparently and fairly and, for the majority of our customers, the new pricing offers the biggest reductions. We understand that an increased standing charge may disadvantage very low users, but as a small, independent supplier we've chosen to concentrate our efforts developing and providing one tariff which we think will offer the best value to the majority of users.

As well as this, all electricity providers incur fixed costs from the network operators for providing a connection and services such as meter provision and meter reading, which are unrelated to the amount of units consumed. Good Energy covers these costs with our standing charge. Some electricity providers do this by charging  customers more for an initial number of units used and then decreasing the unit price thereafter, or by incorporating both charges into one rate. This often works out the same as their standing charge tariff, if not more. We think it's fair to show you the true cost of your supply, so we split the charges out.

The fixed costs Good Energy has to pay have increased across all regions in 2009 and, as a result, we've increased our standing charges. However, because we've worked hard to buy your power at the best possible rate, we've been able to decrease the price you pay for the units of electricity you use. Most of our customers understand the importance of energy efficiency, and have indicated that price transparency is important to them.

We'll consider all of our customers' comments and bear them in mind when we review our prices again in the future.

The Good Energy Team