SSE raise prices
20.03.08
Scottish and Southern Energy (SSE), a UK energy supplier and generator, blamed a sharp rise in wholesale energy prices for its recently announced energy tariffs increase. The decision made SSE the last of the UK's six major suppliers to increase it prices this year.
We are interested in this story because it demonstrates the continuing pressure on energy-intensive businesses to find ways to reduce their energy costs, and to think strategically about security of supply issues.
Here is the text of the story as it appeared at
Times online
SCOTTISH and Southern Energy last week became the last of the “big six” suppliers to increase its tariffs this year, but experts say further hikes are on the way.
New SSE customers on standard tariffs will pay 15% more for their energy, equivalent to about £131 for dual fuel. Its average bill for standard direct-debit customers has gone up from £875 to £1,006.
Its 5.8m existing customers on standard tariffs will not see the price hike until the end of the month.
Npower, EDF Energy, British Gas, Scottish Power and Eon have already lifted prices by a similar amount.
Like all its rivals, SSE has blamed the sharp rise in wholesale energy prices for the increase.
The average rise for electricity-only customers is 14.2% while gas-only customers will see a hike of 15.8%. This is equivalent to £50 more on electricity bills and £85 on gas, according to price comparison website Uswitch.
Nevertheless, SSE remains the cheapest for standard dual-fuel tariff customers paying by direct debit, although EDF energy comes close at just £1 more a year. EDF is slightly cheaper overall if you pay by cash or quarterly cheque.
The most expensive provider is Scottish Power at £1,100. British Gas charges an average of £1,055.
The price hikes mean that average household energy bills in Britain have gone up by 14% since the beginning of the year – equivalent to £128, adding around £1.5 billion to the energy firms’ coffers, according to Uswitch.
However, experts say there is more pain to come. Uswitch estimates a further 10% (£102) increase is likely before the end of the year.
Wholesale gas has increased by 26% since the beginning of the year and wholesale electricity is at a new high following a 13% increase.
Though crude oil prices tumbled below $100 a barrel last week, the impact of market volatility will result in higher bills.
Joe Malinowski of The Energyshop, a comparison website, said: “The ongoing financial crisis in world markets has spilled into energy with a knock-on effect on wholesale gas and electricity prices in the UK.”
The impact of higher bills can be reduced by going online, where on average you pay £187 or 18% a year less.
The cheapest online deal is provided by Npower with its Sign Online tariff. This costs £795 a year – a saving of £261 against the supplier’s standard plan.
SSE’s online dual-fuel tariff costs £896, which is £110 cheaper than its standard rate.
The rates you pay for energy are different in different regions, so always check using comparison sites such as Uswitch or The Energyshop to find the best deal in your area.
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