Calls for price cuts as energy firm profits soar
21 May 2014
Energy group SSE has reported a 9.6% rise in last year’s profits to £1.55 billion.
SSE’s raised prices last November by 8.2%, saying that profits from households had fallen due to lower gas consumption and milder weather. Britain’s second largest energy supplier said that all of the profit came from its wholesale arm rather than retail, which had seen considerable downturn.
SSE in recent months promised to freeze prices until 2016, but the Labour party are now saying that the supplier can afford to actually lower prices. Consumer group Which? also said that more of the gains should be passed on to the consumer.
Richard Lloyd, executive director of Which?, said: ‘With healthy group profits and wholesale gas prices falling, we expect SSE to promise not just to shield people from price increases but to fairly pass on lower costs to their customers’.
Alistair Phillips-Davies, SSE chief executive, said: ‘We introduced our price freeze right at the end of the last financial year and it has been hugely popular. It remains the only such commitment available to all customers and will mean we take a hit on retail profits over the next couple of years’.
Besides retail losses, the many arms of SSE group have seen sustained growth. Transmission and distribution reported profit increases of 9.3% – electricity transmission in particular was up 48% to £136.7m in the year to 31 March. A one-off £90 million profit was also reported from the purchase of a gas field in the North Sea.
With pressure from Which? and political parties, other energy companies are likely to voice an opinion soon and possibly reignite talk of a price war.