SSE to hike gas and electricity prices by 8.2%


Updated on 10 October 2013 | 5 Comments

SSE is the first of the ‘big six’ to announce winter price increases.

Millions of SSE customers will see an average 8.2% rise in the cost of their gas and electricity bills from next month.

The energy giant has blamed the increase on the rising cost of purchasing wholesale energy, transporting this energy to households and Government-imposed levies.

The company says that for a typical dual-fuel customer, wholesale energy prices had gone up 4%, paying to use delivery networks was 10% more costly, and Government levies were 13% higher.

From 15th November, SSE’s average annual standard dual fuel energy bill, for those who pay by monthly Direct Debit and receive a paper bill, will be £1,380. This is up from £1,274 and represents an increase of around £2 per week or £104 over the year.

These costs are based on a typical consumption of 16,500kWh of gas and 3,300kWh of electricity per year.

The price hike will impact 4.4 million electricity customers and 2.9 million gas customers, though those on fixed-price tariffs will be shielded from the changes. SSE is pledging to not to raise prices again before Autumn 2014 at the earliest.

Customers that will be affected will be notified by 15th October.

Getting defensive

SSE has gone on the attack about the price rise, laying the blame on politicians.

Will Morris, Group Managing Director of Retail, said: “We’re sorry we have to do this… 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.

"But over many years policymakers themselves have failed to highlight adequately the cost to consumers of the policies they have pursued in Government. 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."

The energy giant said that by transferring the costs of environmental and social policies from energy bills to the taxpayer, the move would immediately take £4 billion of UK energy bills. This would cut a typical dual fuel bill by around £110 this year alone according to SSE.

SSE said that it strongly believes that rising prices do not necessarily have to mean higher bills as falling consumption in recent years mean people are spending less. Though arguably rising energy bills have caused customers to cut down on what they use.

SSE points out that Ofgem is set to lower this average usage benchmark to 13,500kWh of gas and 3,200kWh of electricity by January 2014. Based on these figures, on 15th November SSE’s average annual standard dual fuel energy bill would rise from £1,131 to £1,224.

However, National Debtline reported that it had received a record 15,502 calls from people seeking help with energy debts in the first six months of this year. This is up 10% on last year, and 111% compared with five years ago. The charity said it got more calls on energy bill problems than payday loans and mortgage or rent arrears.

Shopping for a new energy tariff? Check out the lovemoney.com utilities comparison centre!

Domino effect

SSE is the first of the ‘big six’ energy companies to announce a price increase this year.

The energy giant was also the first last year when it announced a price increase of 9% in August.

The move sparked a domino effect among the big six energy companies which followed SSE to announce price rises of between 6% and 10.8% from October to December.

The same is likely to happen this year, so now is the time to shield your household from price rises.

The cheapest tariffs

Switching onto a cheaper deal and fixing your bills can protect you against the price rises to come.

Below are the cheapest tariffs available right now that all come to less than what the SSE average bill will rise to in November.

Tariff

Average cost

Savings vs typical bill*

Savings vs. SSE 8.2% bill hike

Type

Notes

Cancellation charges

First Utility iSave v16

£1,155

£265

£225

Variable

Online billing. Paper bill available for extra £12 pa.

Standing charges and unit rates frozen until March 2014.

None

First Utility iSave v9 April 2015

£1,170

£250

£210

Fixed

Fixed until April 30 2015.

£30 per fuel until end of fix

Sainsbury’s Energy Online October 2014

£1,172

£248

£208

Discounted variable

Guaranteed to be below Sainsbury's Clear & Simple tariff unit rates until 31 October 2014

£30 per fuel until 31 October 2014

nPower Online Price Fix November 2014

£1,182

£238

£198

Fixed

Online management only. Fixed until November 30 2014.

None

EDF Energy Blue+Price Promise March 2015

£1,184

£236

£196

Fixed

Fixed until March 31 2015.

None

* Savings against an average bill of £1,420 as determined by Ofgem                                                            

All calculations are for an average usage dual fuel household paying by monthly direct debit. Average usage as defined by Ofgem is 16,500 kWh pa of gas and 3,300 kWh pa of electricity.

First Utility recently announced it would freeze prices for variable tariff customers until March 2014. So you can get access to the cheapest deal that will stay the same at least until the winter is over.

If you are looking to lock in for a long time EDF Energy offers the longest fixed tariff at the moment with its Blue +Price Freeeeze March 2017. A typical bill will cost £1,340 a year, but there are no early termination charges so if prices drop you can move on without a penalty.

Compare energy deals with lovemoney.com

More on energy:

Ten ways to save on energy

The UK's worst energy provider

Who owns the UK's big energy companies?

Ways to pay for energy efficiency improvements

Standing charges: what does your energy supplier charge?

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