Delivering on our promise

Last month, we promised that we would pass on any cost savings resulting from proposed changes in government policy to all of our customers in full, before the end of our financial year.

This is how we’re going to do it.

The Government is about to launch a consultation on changes to the ECO energy efficiency programme that are expected to cut the cost of the scheme considerably. A reduction in the expected level of electricity network charges is also in prospect.

We’re expecting these savings to come through from April, and that means it will cost us less to supply people with energy in 2014/15 than it would otherwise have done. So we are cutting the unit rates for customers on our variable tariffs by an average of 3.5% from 24 March 2014.

When costs go up, prices eventually have to go up. When costs come down, so can prices. It’s that simple.

Unlike some of our competitors, we think it is totally unacceptable to penalise customers on fixed and capped price tariffs for their loyalty by excluding them from these cost savings. So we will be cutting their unit rates by the same amount - equating to a saving of £38 a year for a typical customer.*

All electricity customers will also receive a £12 government rebate in autumn as a result of the Warm Home Discount effectively being paid for through general taxation.

As we said last month, the overall saving equates to around £50 a year (or roughly 4%) for both fixed and capped customers and for a typical dual fuel customer on a variable tariff.** That means the annual bill for a typical dual fuel customer, averaged across all regions, will come down from £1,224 to £1,174.

As well as cutting prices in the short term, we have also promised to cap GB our prices at the new, lower level until Spring 2015, subject to there being no marked and sustained increase in wholesale energy costs, network costs or new policy-related costs. This reflects the fact that a significant amount of the upward pressure on energy bills has been removed by the Government’s action to bring down costs.

We’ve been calling for government scheme costs to be taken out of energy bills and paid for through taxation for some time now, and we’re really pleased to see the Government taking a very progressive step in funding a rebate for the Warm Home Discount through taxation for the next two years.

But the simple fact is that all government levies should be moved off bills so that they are paid for fairly and progressively and the fuel poor are better protected. It’s the right thing to do and has almost unanimous support from customers, charities and consumer groups. I’m yet to hear a single convincing argument against it.

Even with a price cut, we know that energy costs are still a worry for many people and that there will still be those who will struggle with their bills. We’re doing all we can to hold down prices, but we have a very clear message to anyone who is worried: get in touch and we can help you.

There is a lot of practical and financial help available and it can make a real difference. If you have any concerns, please call one of our customer service advisors on 08000 727 222.

 


*This will be implemented from 16 June and backdated to cover the entire period from 24 March, based on customers’ consumption.
**Based on Ofgem’s industry standard annual household consumption figures of 13,500 kWh of gas and 3,200 kWh of electricity, as adopted from January 2014.

About the author

Will Morris Group Managing Director, Retail

Will Morris is Group Managing Director of SSE's Retail business, having joined the company in 2012 from Intercontinental Hotels Group, where he had been Chief Operating Officer. Will has spent 22 years in blue chip customer facing service businesses - including British Airways and the Walt Disney Company - both in the UK and internationally. At SSE, Will has Management Board-level responsibility for our business in energy supply and energy-related services, working towards the long-term goal of making SSE the number one supplier of energy and related services.

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