Britain’s cheapest household electricity and gas supplier walked into an energy rip-off storm today as Scottish and Southern Energy reported profits soaring through £1bn for the first time and a massive increase in handouts to shareholders. SSE, the supply company trading in London as Southern Electric, has long trumpeted itself as the country’s cheapest energy provider. However, financial results out today show while it remains cheapest on annual dual fuel bills, its charges have enabled the group’s generating and supply business to increase profits by 45% to £642m in the year to March, which alongside profits from running electricity and gas mains networks, helped group pre-tax earnings swell 24% to £1.08bn. On the back of that, dividends for the year are being boosted bymore than 18% to 55p a share. Chairman Sir Robert Smith defended SSE’s figures. ‘This excellent financial performance, with profit before tax exceeding £1bn for the first time, is a result of the implementation of a strategy to deliver strong operational performance along with our policy of responsible pricing, helping us to gain more than one million additional customers,’ he said. ‘SSE’s first responsibility to shareholders is to deliver sustained real growth in the dividend.’ SSE’s policy of being the cheapest supplier prompted this spring’s household energy price war and it is nowo ne of the country’s leading providers, with 7.75m customers. However, consumer campaigners have loudly criticised SSE and the country’s five other main suppliers, accusing them of profiteering by continuing to charge prices that still generate huge profits. SSE’s strong performance will have focused the eyes of the big beasts of the European power and gas industry. SSE and British Gas group Centrica are the only independents still in the market. Following Spanish group Iberdrola’s acquisition of Scottish Power last winter, SSE is seen as a sitting duck for takeover by the likes of German giants RWE and E.On (respective owners of npower and Powergen), French group ED (which has already carved up large parts of London and the South), or Gazprom, the ambitious Russian behemoth. SSE today pledged to give credits of up £100 to households that cut consumption by 10%, buy energy-efficient appliances and insulate their lofts. It also promised to cut carbon dioxide emissions by 20% over the next 10 years from its power stations. They produce up to 10 gigawatts of power, accounting for nearly a one-sixth of the UK’s generating capacity.

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