10th Oct 2013 07:39
LONDON (Alliance News) - SSE Thursday announced that its household electricity and gas tariffs will be hit with an average increase of 8.2%, causing share prices in the company to rise in early trading.
The utilities provider said that the changes to its charges reflect the increasing costs associated with buying and delivering wholesale energy to customers' homes, as well as being hit by government-imposed levies collected automatically through energy bills.
SSE will implement the changes to its tariffs on 15 November this year. The company says that the costs across the business have increased; buying energy in global markets is up 4% for a typical dual fuel customer, paying networks to deliver energy to customers is up 10% and government-imposed levies on energy bills have added 13%.
The price rise follows SSE's October 2012 rise, within which it committed not to increase prices again until July this year. While extending beyond this deadline, the firm sated in its Notification of Close Period that it expects to report a loss-making retail sector for the six months to 30 September 2013, demonstrating that the rising costs cannot be absorbed beyond 15 November.
SEE estimates that the price rises equates to approximately GBP2 per week for a typical dual fuel customer. In order to demonstrate its commitment to protecting clients, the company pledged today not to raise prices again until August 2014 at the earliest.
Will Morris, Group Managing Director for Retail at SSE, 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.
"Eighty five per cent 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," he said.
Shares in the utilities firm were up 1.29% in early trading Thursday to 1472.70 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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