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SSE: Why we’re freezing energy prices

Gas hob flame

In good news for Which?’s Fix the Big Six campaign, SSE has announced a price freeze until 2016 and a plan to separate its retail and wholesale businesses. Here’s SSE’s Will Morris to explain today’s announcements.

Freezing our prices until at least 2016 is the longest unconditional energy price commitment ever made – and we think this action will make a real difference.

Before deciding to freeze prices we surveyed people to find out what they thought about energy bills. And the answer that came through was loud and clear: 81% of people were worried about energy prices rising again in the next two years. This echoes Which? research that consistently finds 8 in 10 are worried about the cost of energy.

We listened and hope to give all our customers peace of mind by guaranteeing not to raise our standard prices until at least 2016. Sure, some other companies might have a few fixed price deals, but these come and go. This is for everyone and regardless of what happens to global energy prices.

How SSE can freeze prices

But you might ask how can we deliver this? We’re making cost efficiencies within our company, we’ll be making less profit from supplying energy, we’re buying ahead to safeguard against energy price shocks and the Government has listened to calls to make its energy efficiency scheme more cost-effective.

But we don’t want to stop at today’s price freeze. We’d prefer to reduce bills again and to hold them as low as possible for as long as possible. And that’s why we want the cost of government schemes – to support good things like energy efficiency and low-carbon electricity – to come off energy bills altogether and be paid for through general taxation. That would allow us to take around £100 off bills, at next year’s figures.

We’re not against the aims of these policies, which have been introduced by all the main parties. We just want to see a fairer way to pay for them. And what’s more, people agree – 62% of those we surveyed agreed with us that they should be paid for through taxation and only 17% disagreed.

Separating retail and wholesale buisinesses

And chiming with Which?’s Fix the Big Six campaign, we also plan to legally separate our retail and wholesale businesses by March 2015. We hope this plan to improve transparency proves our appetite for reform that’s in the interests of our customers.

We’ve taken action today but we also want to work with politicians from all parties to tackle the rising cost of supplying energy. We urge them to join us in taking action, and together we can make an even bigger difference for customers.

What do you think about SSE’s action to freeze energy prices and its plans to increase transparency? Do you want to see other energy suppliers follow suit?

Which? Conversation provides guest spots to external contributors. This is from Will Morris, SSE Retail’s Group Managing Director. All opinions expressed here are his own, not necessarily those of Which?.

Comments
Profile photo of Lee Beaumont
Member

When I read this news on Twitter this morning I was over the moon as Ebico (who I’m with) use SSE. But after reading the press pages of the SSE website it says “It excludes white label partnerships with M&S Energy and Ebico.” so it’s pointless for me 🙁

But congrats for other SSE customers 🙂

Profile photo of Beryl
Member

Why have SSE announced this the day before Ofgem’s report due tomorrow? They obviously know something we don’t and have decided to make a move before hopefully the other 5 follow suit.

The news to legally separate their wholesale and retail business is the best news to date. Not sure how much political influence is involved and to what extent it will affect Ed Millibands plans to freeze energy prices if Labour win the next election.

All will be revealed tomorrow but this news is encouraging and should at the very least introduce more competition into the energy market.

Member
Leigh Fairbrother says:
26 March 2014

This is a headline grabbing statement, but is it really more than just spin?

SSE prices are currently not competitive in the wider market, so although they may not increase, there are certainly significantly cheaper deals out there right now. In addition to this, although this announcement offers some security against future prices increases there are already many Fixed price tariffs out there fixed well beyond January 2016 which provide greater security and lower costs. If anything this serves to negatively effect a competitive market by suggesting that either it would be a good idea to switch to SSE or if you are with SSE to stay with them.

If we want better energy prices we need to vote with our feet and go to where the energy is competitively prices, only when we do this in significant numbers will the big 6 be forced to react with truly positive pricing actions.

#energyswitching

Profile photo of william
Member

“We’re making cost efficiencies within our company” — so why haven’t they been doing that from the off, are they saying that they’ve been running a cost in-effective company all this time and couldn’t be bothered to sort it out cos the customer just footed the bill ?

“we’re buying ahead to safeguard against energy price shocks” — But aren’t you supposed to have been doing that all along ? Yet the buyers have to date only ever seemed to have bought in when the price is high thus forcing you and the rest of the sharks to keep prices higher for longer when the whole sale price falls. Yet never when the price is cheap meaning you can keep the prices lower when the wholesale prices rise. Cos as we all know, prices shoot up like a rocket and fall like a feather in line with wholesale price movements. I’d suggest getting better buyers.

“We hope this plan to improve transparency proves our appetite for reform that’s in the interests of our customers” — Why bother doing that, surely it would be easier to just publish how much it costs to produce your energy and how much you them sell it to the market. And in the interests of transparency you could do that by the end of this week and not the end of March 2015.

Profile photo of malcolm r
Member

This statement is a little odd. Looking at Southern Electric (the SSE supplier in our area and said to have the same deals):
Standard Tariff Gas 4.89p Electricity15.1p now, presumably, fixed to 2016.
However you can have a fixed price tariff to March 2017 for the same unit costs.
So just how good, or possibly how political, is this announcement. Maybe I have missed something?
It will always pay to look at Which? Switch for the deal that is best for you.

Member
Rosie says:
26 March 2014

Having read that they’re “having to” axe 500 jobs and 4 offshore wind farm projects to freeze prices, I’m disgusted with SSE (and, having been a customer with Southern Electricity for years, I’m now looking at alternative providers, though they’re all the same!).
Unless the 500 jobs are sales jobs, where they’re continually having to re-jig tariffs to “compete” in the market, rather than just offering a fair price in the first place (which would be much cheaper for the company and the customers!).
So why didn’t their press statement say they were cutting chief exec and directors’ fees and bonuses – and using SSE staff to problem-solve and come up with new ideas instead of spending a fortune on consultancy fees, as all large companies do? And as for shareholders, why didn’t the statement say they’ll be reducing the dividend that shareholds receive (investing in the stockmarket is about risk, which means taking the rough with the smooth).
Such a shame Tony Benn never got to be Prime Minister – we wouldn’t be in this mess that we’re in since privitisation of all the country’s service industries!

Member
Stafford Gordon says:
27 March 2014

I’m skeptical about this move by SSE, I think it’s simply a pre-emptive ploy to gain customers before the other companies do exactly the same thing.

I’ll hang fire before making a decision whether or not to move from my current supplier, but it is certainly better than nothing, and may in fact begin to shift the log jam of the so called competitive energy market.

We are now reaping the results of the policies seeds sewn circa 1980, especially in the banking sector.

Will we ever regain the “National Silver” which was flogged off to the lowest bidders?

Member
sparker says:
27 March 2014

Spin, spin, spin.

Profile photo of william
Member

Sky news are reporting that the wholesale price of gas is now at a 30 month low http://news.sky.com/story/1235827/uk-wholesale-gas-prices-hit-new-low

will SSE be dropping their prices or keeping them artificially high? Only time will tell. Bet they blame those pesky buyers again.

And I’m rather disappointed but not surprised at the lack of response on this convo from Will Morris. Makes this convo look more and more like a sales pitch than a genuine attempt to redress consumer issues.