20th Mar 2008 07:00
Scottish & Southern Energy PLC20 March 2008 SCOTTISH AND SOUTHERN ENERGY PLC DOMESTIC ENERGY PRICES FROM 1ST APRIL 2008 Scottish and Southern Energy plc ("SSE") will increase its prices for domesticelectricity and gas customers on 1st April 2008. Prices for electricitycustomers will increase by 14.2% (average) and prices for gas customers willincrease by 15.8%. Even after these increases are implemented, SSE's prices forgas and electricity will remain the lowest in the UK*. The company last announced a change in electricity and gas prices in February2007. Forward annual wholesale prices for electricity and gas have been risingsince March 2007 and are now around 90% higher for electricity and 100%** higherfor gas than they were then. Alistair Phillips-Davies, Energy Supply Director of SSE, said: "Energy supply in the UK is changing dramatically, with companies having tooperate in volatile markets, which reflect depletion of North Sea oil and gasfields, soaring global demand for all types of energy and over $100 a barrel foroil. Wholesale energy prices have been stubbornly high. "These pressures are compounded by the rising transmission, distribution andenvironmental costs which suppliers have to meet. You cannot resistindefinitely the impact of these issues and I am sorry that all of this hasculminated in the price rises we are announcing today." SSE's responsible pricing policy is that it will seek to be the last, or one ofthe last, of the major suppliers to increase prices if it has to and the first,or one of the first, to reduce prices if it can. In line with this, it will bethe last of the leading energy suppliers to implement a price increase - doingso more than 10 weeks after British Gas put up prices on 18 January and morethan 12 weeks after Npower put up prices on 5 January. Forward annual wholesaleprices for electricity and gas are now 7% and 13% higher respectively than theywere when British Gas introduced its price increase. These are generally the coldest weeks of the year, during which the averagehousehold typically uses around 40% of its annual gas consumption and 30% of itsannual electricity consumption. By delaying price increases until after thestart of British Summer Time, SSE's "dual fuel" customers will have paid anaverage of £44 less for their electricity and gas in the first three months ofthis year than customers of British Gas. The consistent implementation of SSE's responsible pricing policy means that its"dual fuel" customers have paid an average of £433 less for their electricityand gas over the past four years than have customers of British Gas. Thispolicy is explicitly designed to help minimise the impact of fuel bills onvulnerable and 'hard to reach' customers. Moreover, SSE offers 'tailor-made'payment arrangements to customers who may be having difficulties paying for theelectricity and gas they use. SSE's energyplus care tariff provides customers with a 20% reduction from theirenergy bill compared with standard tariffs and a package of other services toimprove the energy efficiency of their homes. Alistair Phillips-Davies added: "I can assure customers of one thing: our commitment to responsible pricing willnot change. We will still aim to be the first, or one of the first, suppliersto cut energy prices if we can and the last, or one of the last, to increasethem again if we have to. "In the meantime, we offer a variety of services to help meet the needs ofvulnerable customers and we will continue to work with them so they can managetheir energy bills. We are keen that a more coherent and robust approach isadopted to make a real and lasting impact on the issues affecting vulnerablecustomers. "For that reason, we have today published seven principles for a code ofpractice for helping vulnerable customers which we believe should be adoptedthroughout the energy supply industry." SSE believes that the seven principles for an energy supply industry Code ofPractice for helping vulnerable customers should be: Real issue Price is the real issue. Energy suppliers charge different prices at differenttimes of year, so those who charge most for energy should contribute most tohelp vulnerable customers. Real contribution Suppliers should make an appropriate level of contribution to help tackle fuelpoverty. This should recognise the size of their business and their respectiveimpact on household energy bills. Real help 'Social' is not a label. Any 'social' tariff offered by an energy supplier mustbe the lowest-cost tariff that it makes available to customers, so they aregetting real help. Real difference The market is competitive. Any 'social' tariff offered by an energy suppliermust be lower than the UK average direct debit tariff for 'dual fuel' so that itis making a real difference. Real flexibility Vulnerable customers are different people with different needs. This requiresreal flexibility and suppliers should offer different ways of helping them: 'social' tariffs; charitable donations; donations to trusts; reducing surchargesfor pre-payment meters; bespoke customer services; community programmes. Real partnership Working in partnership to find the most vulnerable customers is crucial.Government must work with suppliers, agencies and other stakeholders so that themost vulnerable customers are identified and helped. Real accountability Everyone benefits from transparency. Suppliers' activities to help vulnerablecustomers should be the subject of tough and independent monitoring and analysisso they can demonstrate real accountability for their actions. NOTES * Based on the average "dual fuel" standard tariff bill paying by quarterly ordirect debit averaged across the UK and comparing all six major UK suppliers,and based on energywatch's average domestic consumptions (3,300 kWh electricityper annum and 20,500 kWh gas per annum). Includes VAT at 5%. SSE's StandardGeneral Domestic Tariff for "dual fuel" domestic customers will now be £1,006per annum. This compares with £1,055 for British Gas and £1,099 for ScottishPower. Based also on gas and electricity prices at 1st April 2008. ** Based on a comparison of the average forward annual wholesale prices forelectricity and gas in February 2007 with the average in February 2008. Source:Heren Energy Ltd. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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