Domestic Energy Prices from 2

RNS Number : 8217B

Scottish & Southern Energy PLC

21 August 2008

 



SCOTTISH AND SOUTHERN ENERGY PLC

DOMESTIC ENERGY PRICES FROM 25 AUGUST 2008

Scottish and Southern Energy plc ('SSE') will increase its prices for domestic electricity and gas customers on Monday 25 August 2008. Prices for electricity customers will increase by 19.2% (average) and prices for gas customers will increase by 29.2%, and they will be held at the revised levels until at least the start of 2009.  

Forward annual wholesale prices for electricity and gas rose by 50%* and 60%* respectively in the period between February 2008 and July 2008, and by 190%* for electricity and 230%* for gas between February 2007 and July 2008.  

Against this exceptionally difficult background, SSE has worked hard to maintain a responsible pricing policy. Following the new prices, SSE's 'dual fuel' customers will continue to pay less for their energy than customers of British Gas and, compared with them, are on course to pay an average of £100** less for their electricity and gas over 2008 as a whole.  

The increases will not apply to customers on SSE's social tariff, energyplus care, until the end of the forthcoming winter period at the earliest. This tariff already provides qualifying customers with a discount of 20% compared with SSE's standard tariffs. SSE is committed to increasing the number of customers benefiting from energyplus care to 100,000 by the end of March 2009.  

 Alistair Phillips-Davies, Energy Supply Director of SSE, said:

'The world is experiencing an energy shock of a kind not seen since the early 1970s, but which is likely to have more profound and lasting consequences. Global demand for all types of energy has risen steeply and supplies of finite resources like oil and gas are under intense pressure. That's one of the reasons why we need to reduce our dependency on fossil fuels, and, over the next five years, SSE is investing £3 billion in renewable energy to help achieve this.  

'The country now relies on energy imports and the prices we all pay for electricity and gas are ultimately determined by the law of supply and demand in a global economy. This is what lies behind much of the dramatic increase in wholesale energy prices we have experienced in the UK.  The pressures and volatility in the wholesale gas market were demonstrated again just yesterday, when prices for wholesale gas for this coming winter increased by over 10%. 

'Energy suppliers have to take steps towards covering their costs and I am sorry that we cannot delay these price rises any longer. Although this will be little consolation, these increases would have been even higher but for the fact wholesale prices had fallen back a little in recent weeks.

'People are naturally very concerned about the many financial pressures they are now facing, but when it comes to electricity and gas there is always help available, from free energy efficiency measures to tariff choices and tailor-made payment plans.  

'This is not a time for gimmicks. We stand ready to do real work with our customers through this difficult period. Specifically, we have set up a new customer service unit dedicated to giving information, advice and help to customers who may have difficulty in coping with the impact of higher energy bills. We are writing to all of our customers to set out the type of help that is available, and where they can get it.'

Notes:

*Based on comparisons of the average forward annual wholesale prices for electricity and gas. Source: Heren Energy Ltd.

**Based on a quarterly 'dual fuel' standard tariff bill averaged across the UK and based on energywatch's average domestic consumptions (3,300 kWh electricity per annum and 20,500 kWh gas per annum). Includes VAT at 5%. Taking an average demand profile for an entire year and applying comparative prices on each day of the year. Price comparisons for 2008 as a whole are based on gas and electricity prices remaining unchanged from those at 25 August 2008.

SSE's 'dual fuel' domestic customers will now pay £1,259 per annum; the equivalent for customers of British Gas is £1,328; for customers of E-ON it is £1,297; and for customers of EDF it is £1,211. Based on a quarterly 'dual fuel' standard tariff bill averaged across the UK and based on energywatch's average domestic consumptions (3,300 kWh electricity per annum and 20,500 kWh gas per annum). Includes VAT at 5%. 

SSE's 'dual fuel' domestic customers have paid an average of £445 less for their energy over the last four years (September 2004 - August 2008) than the equivalent customers of British Gas. Based on a quarterly 'dual fuel' standard tariff bill averaged across the UK and based on energywatch's average domestic consumptions (3,300 kWh electricity per annum and 20,500 kWh gas per annum). Includes VAT at 5%.

The standing charge for electricity pre-payment customers is being removed, so that these customers will only pay for the units they consume. 

Contact: 0845 0760 530

Justyn Smith or Sharron Miller McKenzie

 

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