Scottish and Southern Energy raising prices

Scottish and Southern Energy raising electricity and gas prices

Scottish and Southern Energy is to increase gas and electricity prices from September – the third major supplier to do so.

Millions of Scottish and Southern Energy (SSE) customers face higher power bills, after the group decided to increase gas prices by an average of 18 per cent and electricity prices by 11 per cent from September 14. The increase will mean a typical annual dual-fuel bill will rise from £1,094 at present to £1,265, an increase of £171.

Scottish Power and British Gas have already announced price hikes, and like its rivals SSE - which owns Southern Electric, Swalec and Scottish Hydro - said its decision reflected higher wholesale gas prices, a higher cost of using energy networks and the cost of social and environmental schemes.

SSE, which has 5.2 million household electricity customers and 3.6 million household gas users, added it will not raise prices again for households until August 1, 2012.

SSE chief executive Ian Marchant said: “I am sorry that we have had to announce an increase in household energy prices at a time when many people’s budgets are under strain, but the upward pressures on prices have become too great.”

Since its last gas price increase, in December, wholesale costs of electricity and gas have risen by 23 per cent and 40 per cent respectively, he said. Consumption had also fallen sharply since April 1 due to the mild weather, with households using 2.9 per cent less electricity and 5.8 per cent less gas.

Profits for the first half of the year will be below the comparable periods in both 2009 and 2010, though SSE said this will have no implications for the full financial year. The firm added that it is “on course to deliver a dividend increase of at least 2 per cent more than RPI inflation in respect of 2011/12”.

“As in each of the last three financial years, SSE will invest more than it will make in adjusted profit before tax in 2011/12,” Marchant said.

Watchdog Consumer Focus’s chief executive Mike O’Connor said: “Knowing another price rise was round the corner will not soften its impact for customers. This increase heaps more pressure on to already cash-strapped consumers and will tip many thousands more people into fuel poverty.” He added that there was a lack of trust in energy firms because consumers are unable to tell whether the increases are justified.

O’Connor said: “Suppliers point to rising wholesale costs. Yet although wholesale prices have risen recently, they remain around a third lower than their 2008 peak.

“Ofgem must get to the heart of whether prices are fair. If the regulator can’t do that it must refer the market to the Competition Commission. The commission is not there to punish companies but to use its forensic skills and experience to find remedies for complex markets which are not serving consumers well. We are pleased that Ofgem has said it is prepared to refer the energy market if necessary, but it must be prepared to act.”

Norman Kerr, director of fuel poverty charity Energy Action Scotland, said: “One of the main reasons given for the latest rise is the cost of providing measures to make homes more energy efficient.

“All customers are paying for these schemes through levies on their bills regardless of ability to pay or level of usage. We believe a fairer way to do so would be through the tax system.”

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