Energy News

Scottish & Southern consider slashing prices

Thursday 13 November, 2008

Scottish & Southern Energy says it is considering cutting fuel prices in the new year, putting pressure on the rest of the "big six" suppliers to declare their plans.

Scottish & Southern Energy (SEE), the UK’s second biggest energy supplier said it was considering slashing prices to stay in line with reductions in wholesale energy prices, at a conference to present their mid-year financial report yesterday.

Ian Marchant, SEE’s chief executive, said yesterday that the priority for next year would be to reduce prices as quickly as possible, partly to assuage politicians and regulators, but also to retain customer confidence. “If we can get prices lower and still make an acceptable margin, it will reduce the political and regulatory risk.”

“Energy supply in Great Britain has experienced an exceptional degree of volatility and intense public scrutiny during 2008,” he added. “SSE remains very mindful of the impact that rising fuel bills have on already hard-pressed households and has done as much as possible to minimise their impact.”

SSE also said that later this month it will reduce the price of its gas for prepayment meter customers by 3%, helping to narrow the price gap between them and customers paying by standard credit terms by around £25 a year.

Consumer groups welcomed Ian Marchant’s speech. Robert Hammond, an energy expert at energy watchdog Consumer Focus, said: “We welcome SSE making the headlines for the right reasons. They should steal a march and be the first to bring down prices at the earliest opportunity.”

The House of Commons Public Accounts Committee has slammed energy companies over confusing bills and lack of information on switching.

According to the report, a quarter of households who have switched electricity suppliers this year have ended up paying higher bills, and that the most vulnerable customers, most notably the the elderly, would benefit from cheaper prices and more clarity over switching.

Britain’s other big suppliers - British Gas (www.britishgas.co.uk), E.ON (www.eonenergy.com), EDF (www.edfenergy.com), npower (www.npower.com) and Scottish Power (www.scottishpower.co.uk) - have not yet made any suggestions of price cuts in the New Year.

Maria Wardrobe, of National Energy Action, said: “We have been calling for all of the suppliers to reduce energy bills for some time now. It seems only fair that the decline in wholesale costs which we have seen since oil prices hit their high in July is passed on to consumers as soon as possible.”

She continued: “If these price cuts came in time for this Christmas rather than early 2009 it would be even better.”

Chris Eagle, commercial manager at EnergyChoices.co.uk said: “The news from SSE will definitely have an impact on the energy market, and we’ll hopefully see rival energy companies announcing plans for rate cuts soon.”

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