Energy Bills: SSE To Raise Tariffs By 8.2%
SSE has become the first of the so-called Big Six energy firms to confirm it is raising prices ahead of the winter, sparking a bitter backlash among consumer groups, politicians and regulators.
The company said household gas and electricity tariffs would rise by an average of 8.2% from November 15, affecting 4.4 million electricity and 2.9 million gas customers.
It is understood several of its competitors also plan to announce increases to bills amid a furious debate on potential reforms to the market centring on environmental and other charges imposed on customer bills by successive governments.
John Fingleton, the former head of the Office of Fair Trading, called for an immediate and "politically independent" investigation into the energy market to restore public trust.
SSE, which trades as Southern Electric, Swalec and Scottish Hydro, blamed its decision to increase bills on rising costs outside its control, which it said it had absorbed for months at its retail division.
It said the move would equate to a typical dual fuel customer paying £2 a week more, but pledged not to increase bills again until August 2014, having last imposed a 9% rise in October 2012.
There is a North-South divide to the increased charges, with customers in the South East facing hikes as high as 9.7% while many in the North and southern Scotland face a 7% rise.
Will Morris, group managing director of SSE's retail business, said: "We're sorry we have to do this.
"We've done as much as we could to keep prices down, but the reality is that buying wholesale energy in global markets, delivering it to customers' homes, and Government-imposed levies collected through bills - endorsed by all the major parties - all cost more than they did last year.
Mr Morris explained: "85% of a typical energy bill is made up of costs outside our direct control and these costs have increased.
"So far this year we have made a loss from supplying energy as a result of the higher costs we have been facing and continue to face.
"We understand and regret that this will add to the pressures on household budgets, but there's a lot we can do to help.
"Rising unit prices do not have to mean rising bills and there remains huge potential for customers to save money by improving further their energy efficiency."
The increases to household bills were announced at a politically-sensitive time, given the debate prompted by Labour leader Ed Miliband's pledge to freeze tariffs for 20 months should his party win the next election.
After the announcement, he took to Twitter to declare that the rise demonstrated "the need to freeze bills", but Downing St described the policy as a "con".
SSE insists its home supply business is currently run at a loss despite rising operating profits on the back of the cold end to last winter.
Its accounts also showed that investment fell by 13% year on year in the 12 months to March.
SSE called for politicians to help cut bills by transferring the environmental and social obligations, making up almost 10% of a bill's total, to central government - claiming it would save consumers £110 annually in 2013 alone.
It accused policymakers over many years of failing "to highlight adequately the cost to consumers of the policies they have pursued".
Energy Secretary Ed Davey said the Government was changing energy bills by cutting the number of tariffs, making bills simpler and clearer, and getting people off poor-value dead tariffs and on to the "best deal for them".
The reaction to the price hikes from consumer groups was one of horror.
Ann Robinson, director of consumer policy at uSwitch, said: "This is a crippling blow for consumers, who are still reeling from last winter's price hike.
"Adding a further £111 to an already sky-high energy bill will leave consumers buckling under the pressure. This will be seen by many as the final nail in the coffin for affordable energy.
"Of course the danger now is that the other big six suppliers will follow suit. This raises the spectre of yet more households forced to cut back on their heating.
"Last winter almost seven in 10 households (69%) went without heating at some point to keep their energy costs down, while over a third (35%) said that cutting back on energy usage was affecting their quality of life or health."
She concluded: "This is the grim reality we face as the cost of energy spirals ever higher."