SSE Energy Services: Standard GB domestic energy prices to increase to reflect impact of higher wholesale and policy costs
· Standard GB domestic dual fuel prices to increase by an average of 6.7%,[1] reflecting sustained increases in wholesale and policy costs, effective from 11 July 2018
· Price change equates to a typical dual fuel bill increase of £76 per year, around £1.50 per week[2]
· 2.36 million customers with SSE Energy Services and M&S Energy will see a price increase
In response to increasing costs, SSE Energy Services[3] has today taken the difficult decision to raise standard electricity and gas prices in a change that will increase a typical dual fuel bill by an average of 6.7%, effective from 11 July 2018. This rise equates to an increase of 5.7%[4] for gas and 7.7%[5] for electricity, meaning a typical dual fuel customer will see a rise of around £1.50 each week. Customers who are on fixed-price tariffs, have a prepayment meter, or are on the vulnerable customer safeguard tariff will not be affected.
SSE Energy Services will also be removing its £6 per fuel, per year paperless billing discount from 11 July 2018.
Stephen Forbes, Chief Commercial Officer of SSE Energy Services, said:
"We deeply regret having to raise prices and have worked hard to withstand the increasing costs that are largely outside our control by reducing our own internal costs. However, as we've seen with recent adjustments to Ofgem's price caps, the cost of supplying energy is increasing and this ultimately impacts the prices we're able to offer customers.
"We will be writing to all affected customers, setting out details of the changes and identifying any ways in which we could help them save money. I'd urge any customer concerned about their energy costs to contact our customer service teams or visit our website[6] as there's plenty of support available, including around £50m of financial assistance available through the Warm Home Discount scheme."
Increasing energy prices is always a last resort. However, sustained increases in the cost of supplying energy, principally from higher wholesale energy prices and the cost of delivering government policy initiatives designed to modernise and decarbonise Britain's energy system, must eventually be reflected in prices. Policies such as those that support low-carbon forms of electricity generation and the national roll-out of smart meters offer benefits for customers in the long term, but require significant up-front investments which are funded through energy bills. SSE Energy Services continues to believe that these policies should instead be funded more fairly through means-tested general taxation.
[1] Our standard GB domestic gas and electricity prices for dual fuel customers will go up by an average of 6.7%, calculated based on a national average across all regions for customers on the Standard Variable Tariff paying by Direct Debit with a paper bill and on an unrestricted meter. Using Ofgem's annual Typical Domestic Consumption Values of 3,100 kWh for electricity and 12,000 KWh for gas. All prices are inclusive of VAT at 5%.
[2] That's equivalent to an increase of around £1.46 a week for a typical dual fuel customer. Calculated based on a typical annual increase of £76, divided by 365 (number of days in a year) and multiplied by 7 (number of days in a week), using Ofgem's annual Typical Domestic Consumption Values of 3,100 kWh for electricity and 12,000 KWh for gas, inclusive of VAT at 5%.
[3] On 1 April 2018, SSE Group completed an internal restructuring to consolidate SSE's GB household energy supply and services businesses, each of which are now subsidiaries of 'SSE Energy Services Group Limited'.
[4] Our standard GB domestic gas prices will go up by an average of 5.7%, calculated based on a national average across all regions for customers on the Standard Variable Tariff paying by Direct Debit with a paper bill, using Ofgem's annual Typical Domestic Consumption Values of 12,000 KWh for gas. All prices are inclusive of VAT at 5%.
[5] Our standard GB domestic electricity prices will go up by an average of 7.7%, calculated based on a national average across all regions for customers on the Standard Variable Tariff paying by Direct Debit with a paper bill and on an unrestricted meter. Using Ofgem's annual Typical Domestic Consumption Values of 3,100 kWh for electricity. All prices are inclusive of VAT at 5%.
