SSE in price cut pledge over green levies

The Government has said it will make an announcement in December on the plan to shift some of its environmental and social charges away from companies so they can reduce bills.

SSE chief executive Alistair Phillips-Davies said: “We would look to implement and pass on any cost reductions that we receive from Government.”

SSE, ranked second of the big six utilities and which owns Ferrybridge power station in West Yorkshire, raised gas and electricity prices by 8.2 per cent in October. It was the first in the industry to announce price increases which have been criticised by politicians and consumers.

The company said that its retail business slumped to an £89.4m operating loss in the six months to September 30, hit by high gas prices, rising distribution charges and the cost of Government social and environmental policies.

Exane BNP Paribas Iain Turner said: “The retail side of things is quite tough and that shows what a difficult market that it is at the moment. Not only is it not that profitable, but you’ve obviously got all the political grenades flying around as well.”

Mr Phillips-Davies said SSE’s price hike, which was more than three times the rate of inflation, could fall by half to around four per cent.

EDF Energy undercut the competition on Tuesday by announcing a bill hike of 3.9 per cent, pre-empting the Government’s promise to reduce the green taxes that the big six blame for their need to raise prices.

SSE’s adjusted pre-tax profit at the group level came in at £354m, 12 per cent lower than the year earlier, but the interim dividend was raised 3.2 per cent and SSE said it was on track to increase the dividend by more than the rate of inflation for its 2013-14 financial year.

Opposition Labour leader Ed Miliband promised in September to freeze prices for 20 months if he wins a 2015 election. That wiped £1.2bn off SSE’s value in two days in September. The shares have retreated around 11 per cent since Mr Miliband’s announcement on September 24.

E.ON UK, the only big six player yet to raise its prices for this winter, said it was “increasingly likely” it would need to pass on some of the cost rises it was experiencing. Co-operative Energy said it was cutting a previously announced 4.5 per cent rise to 2.5 per cent.