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British energy price hike stirs anger

Aug. 24, 2012 at 6:30 AM   |   Comments

PERTH, Scotland, Aug. 24 (UPI) -- An impending 9 percent energy price hike from British household energy provider SSE this week brought protests from politicians and consumer groups.

SSE, Britain's second-largest energy company, announced Wednesday it will increase consumer prices for both electricity and natural gas by 9 percent beginning Oct. 15, citing increased wholesale gas costs and other factors.

The Perth, Scotland, energy supplier -- formerly known as Scottish and Southern Energy -- said the price hikes were "unavoidable" due to "sustained increases" in wholesale prices.

The company also blamed the cost of using Britain's electricity and gas networks as well as "mandatory government-sponsored schemes that are passed on to customers."

The price rise will affect 5 million electricity customers and 3.4 million gas customers, who will see their average standard dual-fuel bill jump by more than $160 a year from $1,863 to $2,025, The Guardian reported.

"In a time of economic difficulty, we have endeavored to keep energy bills as low as possible," SSE Chief Executive Ian Marchant said in statement. "That is why we pledged last summer to cap our energy prices for as long as possible and until at least August 2012 and then in January extended this pledge to October 2012.

"Unfortunately, the increases in costs that we have seen since making this pledge can no longer be absorbed and mean that we are unable to keep prices at their current levels beyond this autumn. An increase in our prices has therefore, regrettably, become unavoidable."

While the stock market responded favorably -- SSE's share price surged 1.2 percent to $2.15 on the London Stock Exchange Wednesday -- some members of Parliament and consumer groups accused it profiteering and predicted Britain's other "Big Six" energy companies would soon follow suit.

John Robertson, a Scottish Labor Party MP and a member of Parliament's Energy and Climate Change committee, cited SSE's 2011 profits of $2.1 billion and called the price hikes "irresponsible," The Telegraph reported.

"The fact is SSE energy barons have irresponsibly hiked its prices yet again, while lining their pockets with inconceivably huge amounts in profits. This Tory-led government needs to start putting people before business and do something about it," Robertson said.

Labor Party Shadow Energy Minister Tom Greatrex said the move will throw more Britons in "energy poverty."

"Hard-pressed families and pensioners struggling to make ends meet thanks to the double-dip recession made in Downing Street, will be astonished that SSE, who have seen their profits increase, are now imposing another round of price hikes," he said.

Consumer group uSwitch, which helps energy customers compare prices of services offered by providers, called the SSE price hike "a serious blow for cash-strapped consumers. With winter on its way households will now have to brace themselves for higher fuel prices too."

Ann Robinson, the group's director of consumer policy, noted 83 percent of British households indicated last winter they have rationed their energy use because of cost.

"A round of price hikes this winter will condemn many more to this misery," she said.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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