Profits Soar At Energy Firm SSE After Bill Hike

Retail operating profits at energy group SSE have risen by nearly 40% to £456.8m after the firm hiked up prices for consumers.

The firm's annual results report said the huge rise in earnings "followed an increase in household electricity and gas tariffs in November 2013".

The profits announcement comes in the wake of the General Election, in which Labour had responded to consumer concerns by promising an energy price freeze if it got into power.

It also comes after a year in which, according to government data, the wholesale price of gas has fallen by 16.7%.

Ann Robinson, Director of Consumer Policy at uSwitch.com, said: "The news that profits have soared will not go down well with many SSE customers, especially given higher winter bills following the cold winter.

"With the threat of a Labour price freeze now off the table, the big six have officially run out of excuses for not making proper, double-digit reductions to customers' bills, following significant reductions in the cost of wholesale energy.

"The modest cuts by the big six so far this year have simply not gone far enough, and the fact remains that SSE was the last of the big six suppliers to implement a standard gas tariff reduction this year.

The profits announcement followed a period during which the number of SSE customers fell from 9.1 million to 8.58 million.

And, the company's report said, the amount of electricity used by households fell by 3.7% and the amount of gas used fell by 5.8%.

Gillian Guy, chief executive of Citizens Advice, added: "SSE is making more money from fewer customers. Consumers will rightly question why their bills are so high when the supplier's profits are increasing.

"All energy companies need to make sure their customers are benefiting from a cut in wholesale prices. Cuts made to bills earlier this year were welcome but not enough."

As it delivered its report, SSE said it was closing Ferrybridge C Power Station near Castleford and Pontefract in West Yorkshire by April 2016 because it is forecast to lose £100m over the next five years.

It said the 172 people employed on the site would be redeployed to other sites "where possible", but did not provide details of redundancies.

The group announced its total reported profit before tax, which includes its sectors other than retail, like generation, transmission and distribution, rose by 24.1% to £735.2m.

The company claimed that it is frequently ranked number one for customer service and added that SSE is the only UK supplier to freeze standard energy prices until at least July 2016.

The results report said: "The energy market in Great Britain and Ireland continues to face great competitive, political and regulatory pressure.

"However, as a progressive company, SSE is responding positively to these challenges - delivering for customers with a two and a half year price freeze while getting its own house in order by driving through operational efficiencies and making the investments required to thrive in the future energy market."

On its website, it published data which claimed that 35% of customers were concerned about energy bills in January this year compared to 49% a year before.