SSE’s self-imposed energy freeze comes under investor scrutiny

Britain’s second largest energy supplier with around nine million customers, froze prices in March until January 2016, after putting up gas and electricity bills by 8.2 per cent in October.

This freeze came only a day before energy watchdog Ofgem called for an investigation by the Competition and Markets Authority into the UK energy market.

Ofgem had earlier criticised the effectiveness of competition in the industry, which was backed by political pressure and public outrage over rising energy prices.

The probe could take two years, and energy firms say this uncertainty will be a bar to investment in the industry, which needs around £100bn to modernise the country’s network over the next decade.

Annual operating profits at SSE dropped in May by 32.2 per cent to £246m although the wider group saw adjusted pre-tax profits rise 9.6 per cent to £1.55bn.

The group said it had delivered 15 successive increases in adjusted pre-tax profits since it was formed in the 1998/99 financial year, and aimed to do so again in this current financial year.

SSE, which trades as Southern Electric, Swalec and Scottish Hydro, said the freeze would lower profits, but that it would “streamline’’ its business to cover the shortfall.

The company announced earlier it would cut 500 jobs and shelve four planned offshore wind farm developments.

As a result, SSE hopes to make annual operational cost savings of £100m.