'It's a choice between heating and eating': Families face hardship as energy giant SSE leads price rises with an increase of 8.2%
- SSE blames rise on cost of buying and delivering wholesale energy
- It is the first of the major suppliers to announce a rise this autumn
- The increase, three times the rate of inflation, will come in next month
- SSE says hike is equivalent to £2 a week for typical dual fuel customer
Hard-pressed families could be forced to choose between 'heating and eating' this winter experts have warned after energy giant SSE announced it was increasing gas and electricity prices by an average of 8.2 per cent next month.
The company, which has around 10 million customer accounts, is the first of the major suppliers to announce a rise this autumn, but it is feared others will follow suit.
SSE has blamed the rise on the increased cost of buying and delivering wholesale energy as well as Government levies collected through bills.
It said the latest increase, which is three times the rate of inflation, would come into effect from November 15.
SSE, which trades as Southern Electric, Swalec and Scottish Hydro, said the hike equated to an average £2 a week for a typical dual fuel customer.
But Martin Lewis, of the Moneysavingexpert website, said the price hike would mean many people this winter will have to choose 'between heating and eating'.
'The most important thing to understand is that the big six energy companies are like sheep - where one goes, the rest will almost certainly follow in the next three months.'
Just this week City experts warned price rises were on their way within the next few weeks, although SSE said it would resist as long as it could any upward pressure on prices.
Today, Will Morris, group managing director of retail, 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.'
The company pledged not to put up tariffs again until a year from now.
- Will Morris, group managing director of retail at SSE
Overall pre-tax profits were up from £1.34 billion to £1.41 billion.
But in a trading update last month, SSE revealed it made a loss on its retail operations over the summer after wholesale gas prices rose.
Now it says it has been forced to raise tariffs as the price of buying energy in global markets has risen by 4 per cent for a typical dual fuel customer, while paying to use upgraded electricity and gas networks is 10 per cent more expensive.
Rising energy bills have become a key political issue after Labour leader Ed Miliband pledged that he would freeze tariffs if elected Prime Minister.
Mr Miliband today tweeted: 'New electricity and gas price rises announced today show the need to freeze bills.
Shadow energy secretary Caroline Flint said: 'When times are tough, energy companies should be helping their customers not hitting them with more price rises to boost their profits.'
There has been increasing speculation that a number of the major energy suppliers were preparing to put prices up this autumn.
Chief executive Alistair Phillips-Davies has previously said that the solution to bringing down prices would be to remove 'stealth taxes' on bills which fund low-carbon energy and efficiency schemes.
Customers in the South East will face rises of around 9.7 per cent and at the lower end many in the North and southern Scotland will see bills go up 7 per cent.
Those who use a particularly high proportion of energy at off-peak times may experience a higher percentage increase.
SSE said around 4.4 million household electricity customers and 2.9 million household gas customers in Britain would be affected by the rise. Others are on fixed-price deals.
The average annual standard dual fuel bill, for a customer who pays by direct debit and receives a paper bill, will rise from £1,274 to £1,380
Mr Morris sought to deflect public anger by directing blame on to politicians.
He said: 'We know we will come in for a great deal of criticism for this decision and politicians will no doubt be lining up to condemn us.
'They can't expect to have power stations replaced with new technologies, the network to be upgraded and nationwide energy efficiency schemes all to be funded for free.'
SSE said efficiency measures had seen energy consumption fall in recent years and a typical bill at new prices would have been £400 higher had usage remained at 2005 levels.
It said transferring costs of 'environmental and social policies' to the taxpayer would take up to £4 billion off UK energy bills, cutting each by around £110.
ENERGY PRICES ALMOST DOUBLED SINCE TURN OF THE CENTURY
Research published last month showed the average cost for gas and electricity last year altogether was £1,339, which was 85 per cent more than £710 paid in 2000.
The figures – adjusted to 2012 prices to take inflation into account – show that gas bills went up by 119 per cent and electricity bills by 47 per cent between 2000 and last year.
In the past two years alone, gas bills surged by 19 per cent and electricity by 11 per cent.
According to the study by the House of Commons Library, the worst offenders were British Gas and the former regional electricity monopolies.
All the prices in the Commons research were converted to 2012 prices so they could be compared without being skewed by inflation.
It shows that in 2000, the average domestic gas bill was £383, when adjusted to 2012 prices, more than doubling to £839 in 2012.
It was a similar story for electricity bills, which were £341 in 2000, soaring by a half to £500 in 2012.
British Gas queried the report, saying it was based on figures from the energy watchdog Ofgem that do not take into account its customers’ lower-than-average energy usage.
A spokesman added: ‘Our customers’ energy consumption is much lower than that of the average energy customer due to the steps we’ve taken to make our customers’ homes more energy efficient and help them manage their energy usage.’
Energy Secretary Ed Davey sought to play down the effect of Government levies - designed to help vulnerable households with energy costs, cut energy waste, and encourage investments in low-carbon generation - on the bill rise.
He said these were far outweighed by the wholesale cost of energy.
Mr Davey said: 'This is clearly unwelcome news for customers of SSE. People should take the opportunity now to make sure they are on the best deal available to them.'
Energy minister Michael Fallon told Sky News: 'It is disappointing news. It is for the company to justify a big increase of that kind.'
The Citizens Advice Bureau meanwhile has said SSE's price rise will be a blow for stretched budgets as it pleased with other energy firms not to raise prices.
Citizens Advice Chief Executive Gillian Guy said: 'This price rise will be a blow for stretched budgets. The hike comes at a time when some working households are turning to food banks to feed their families as they struggle to cope with the rising cost of living.
'I hope other energy firms show an understanding of their customers' financial situation by not raising their prices this winter.
'Many households are facing a daily battle try to make their frozen incomes cover mounting energy, food and travel costs. Further increases will push people into poverty.'
A spokesman for industry body Energy UK said: 'No energy company puts up prices unless they have to.
'The costs over which our members have no control - and they make up about four-fifths of the bill - include the wholesale price of gas where the UK is connected to the international markets, the costs of the wires and the pipes which bring energy into millions of homes and businesses and where the price is set by the regulator and passed through on to the bill and the green and social taxes which are also set by others.
'All three have risen and so the energy bill goes up. But the companies have people on hand with help and there is particularly assistance for elderly and poorer customers. If you are worried about paying your bills contact your supplier.'
The spokesman also recommended the Home Heat Helpline for assistance.
The latest announcement comes just one year after the previous rise in energy bills.
The 'big six' energy companies outlined prices rises of between six and 10.8 per cent between October and December last year.
The National Grid warned on Wednesday that the risk of blackouts this winter was at its highest for six years because Britain's reserves of electricity had halved in 12 months.
The report said Britain will have ‘margins’ of only 5 per cent, the lowest since 2007, as it heads into the freezing months.
The margin is the difference between the peak demand and the available supply from the UK’s power stations and import pipelines.
If it gets too low, National Grid can issue warnings to generators to begin producing more electricity to prevent a shortfall developing. But if these warnings do not work and the margin between supply and demand reaches zero, then parts of the country could experience blackouts.
Read more: http://www.dailymail.co.uk/news/article-2451656/Energy-company-SSE-raise-gas-electricity-prices-8-2-cent.html#ixzz2hJwTMyPz
NWN: Re - nationalise these energy companies NOW !
Thank you Mrs Thatcher for selling our utilities to prop up your corrupt regime.