Power company to increase household energy bills:
Scottish & Southern Energy announces price hike. One of the UK's biggest power companies said today it would hike prices at the start of next year. Scottish & Southern Energy will increase domestic electricity bills by an average 9.4% and gas by 12.2%. The increases will come into force in January and follow assurances in July that SSE would not raise prices again during 2006. SSE, which increased tariffs by as much as 13.6% and 15.9% in two rises at the start of this year, said last week that it planned to announce new prices for its seven million customers within the month. The company, which owns Southern Electric, Scottish Hydro Electric and Swalec in Wales, added today that its prices for gas and for gas and electricity combined remained the lowest in the UK. Alistair Phillips-Davies, energy supply director at SSE, said the consequences of three years of high wholesale energy prices were still being felt. He added: "If, as everyone hopes, falls in wholesale energy prices continue and are sustained, we will move as quickly as we can to reverse the price rises of recent years." Based on average standard quarterly prices, SSE said its new gas price from January was due to be £606 a year, compared with £707 currently charged by British Gas. SSE said its new price for gas and electricity combined will be £962, against £1,120 at British Gas. SSE said it had made fewer price increases than all the other major energy suppliers over the past three years. The policy resulted in SSE winning its seven millionth customer in July. It has gained 2.5 million new customers since the start of 2002, although analysts estimated that its revenues could be as much as £1.2 billion lower than if its prices had increased at the same rate as British Gas. Gas and electricity watchdog energywatch said the latest price hikes will be met with dismay from consumers. Allan Asher, chief executive of energywatch, said: "Despite reports that the wholesale price of gas is starting to fall, cheaper domestic energy bills will not follow this year and the market generally shows few signs of genuine competition. "Energywatch remains convinced that only a Competition Commission inquiry into the problems in the energy market will tell consumers whether punishing energy prices in Britain are unavoidable or whether they can be explained, largely, by a market structure that inhibits vigorous competition." Energywatch said more than 700,000 Scottish Hydro customers in Scotland may find "a little solace" in the fact that, despite its third price rise since January, the firm still comes out cheapest for gas and one of the cheapest for electricity. But the Scottish National Party hit out at the move. "At a time when wholesale energy prices are falling, this announcement is only rubbing salt into the wound of thousands of hard-pressed customers already struggling to pay their energy bills," said SNP MSP Richard Lochhead. "SSE needs to match other energy companies' support for schemes to tackle fuel poverty and I hope they fulfil their commitment to help vulnerable customers." 2.10.06