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GAS and electricity prices are not coming down this winter and British households should be happy to be getting such good value domestic energy supply.
That's the message from Southern Electric boss Ian Marchant, chief executive of Scottish & Southern Energy, which today reported a 36% surge in half-year profits to £410 million.
Marchant's comments sparked a furious reaction from consumer groups, who say SSE and its rival firms have plenty of scope to cut bills.
He told the Evening Standard: “We would love to cut prices. We have a reputation for doing so and remain the second-cheapest supplier on the market [behind British Gas]. While we will be offering help for our more hard-pressed customers, we do not see large-scale price cuts this winter.
“But you have to see that in the context of falling demand. Over the last three years gas consumption in the home has fallen 18%. Whether that is the wider use of more-efficient condensing gas boilers, energy efficiency initiatives like insulation, or thermostat management — turning it down by degree makes a saving of 7% — it means that while prices have gone up over that time bills are remaining steady.
“I happen to think that £1100 a year for our product, which has 99.9% reliability, is excellent value for money when you consider it enables us to function and provides us with our heating, our cooking and our entertainment.”
Marchant said SSE's profit surge in the six months to the end of September compares with a poor first half last year when several of its gas-powered and coal-fired plants were offline.
The business is also larger, having attracted 250,000 new customers to take its total up to 9.15 million and producing 7% more electricity from its ongoing investment in wind farms.
He said pressure is coming from rising network upgrade costs and surging customer bad debts, which have tripled in the half year and are to set to come in close to £100 million for the full year.
Ann Robinson, of consumer energy website uSwitch, said: “Energy companies have enjoyed a long period of low wholesale prices. These results give a clear indication of the beneficial impact it is having on their bottom lines. A 36% increase in half-year profits suggests plenty of scope for a further price cut.”
