We're cutting prices
At SSE we have a history of listening to customers and taking actions that make a difference to them. When we stood out from our competitors and led from the front last year freezing prices, we said we’d also look to cut them if we could. Now we’re delivering on that promise with a 4.1% cut on a typical gas bill from 30 April 2015.
But customers shouldn’t have to worry about prices going back up if things change, so we’re guaranteeing they won’t until at least July 2016 – extending our already record-breaking price freeze.
In a competitive market, this means only SSE customers can know for sure that their prices – which for a typical customer will be £64 a year lower than they were at the start of 2014* – won’t increase under any circumstances until at least the summer of 2016. By then our standard variable customers won’t have seen a price rise for over two and a half years.
A lot of people will be asking why it takes so long for changes in wholesale costs to impact on customer bills.
When you’re supplying a product that is so closely linked to volatile global circumstances, providing consistency and peace of mind for your customers is not always easy. Around half of the cost of energy is made up of wholesale prices. This cost goes up and down on a daily basis, depending on a variety of factors ranging from the weather forecast to geopolitical issues.
SSE is committed to giving its customers prices that are both competitive and stable, and our approach to procuring energy in wholesale markets has enabled us to provide customers with more long-term certainty over prices than any other energy supplier in Great Britain. This means buying energy in advance and means that daily and weekly peaks in wholesale prices can be avoided. However, longer term price movements are reflected over time, one of the reasons that we have seen bills increase over the last decade.
This approach of buying in advance can mean reductions to wholesale prices may take slightly longer to have an impact and that is the reason that we are not always able to reduce prices immediately. However, today our household customers on standard tariffs can see that they will benefit from price reductions without having to worry that this relief will be short lived – certainty they cannot currently get anywhere else.
Even though prices are coming down, what’s important is keeping them down over the long term. That’s why today we are also reminding people that retail energy prices are not all due to wholesale energy prices. Looking ahead, we are seeing other costs increasing, such as those from smart meters and government low carbon energy subsidies, and still we have seen no commitment from any of the major UK parties to start paying for these more fairly by taking them off energy bills and funding them through the means-tested taxation system – where people pay what they can afford.
Our promise not to raise prices until at least 2016 was widely welcomed by our customers, all the major consumer groups, and even party leaders at Prime Minister’s Questions and First Minister’s Questions as a bold move to help customers. It was welcomed because it gave customers absolute peace of mind over their energy costs when affordability and the cost of living remained their number one concern. We promised then that we’d still cut prices if we could and now we’re making good that promise, whilst continuing to offer our standard variable customers certainty they currently can’t get from any other supplier.
So today we have a clear message for our customers: SSE’s prices are coming down, they’re staying down and we want to work with government, opposition parties and consumer groups to bring them down further.
*Based on a duel fuel customer and Ofgem’s standard consumption