Energy firm behind Southern Electric, Swalec and Scottish Hydro says £398m half-year profit needed to ‘keep the lights on’
SSE, the energy company behind Southern Electric, Swalec and Scottish Hydro, has revealed a leap in profits of almost 40%, just a month after announcing a 9% increase in bills.
The UK’s second-largest generator of electricity said its £398m half-year profit was necessary to “make investments that keep the lights on”. However, consumer groups, and even rival energy providers, questioned the scale of the increase.
Richard Lloyd, executive director of Which? consumer magazine, said it bolstered the case for an independent review of gas and electricity charges.
“Without greater scrutiny of energy prices, consumers simply will not believe that they’re getting a good deal,” he said.
Meanwhile, the Co-op’s fledgling energy business warned that the SSE results would further alienate customers. “Announcements of huge profit increases for shareholders do nothing to help the tarnished image of UK energy industry or get to grips with consumer concerns,” said Nigel Mason, of Co-operative Energy. “This profit announcement off the back off a 9% bill increase will be a bitter pill for SSE customers to swallow.”
SSE announced a 5% increase in its payout to shareholders. The company’s 9% price rise last month hit 5 million electricity customers and 3.4 million gas customers.
The big six energy companies, which include SSE, are trying to distance themselves from the furore over alleged gas price manipulation.
Ian Marchant, SSE’s chief executive, said he was keen to know whether the wholesale market had been rigged or not. “If there is evidence of manipulation I want to know as much as anyone else, as I buy gas for our customers and I want to know if we’ve been affected and whether our customers have been affected.”
SSE has said it participates in the energy market in a “fair and legitimate way”.
Scottish Power has distanced itself from the allegations by saying it was definitely not involved in any of the gas trades under particular scrutiny by the Financial Services Authority. “No day-ahead gas trades were executed by Scottish Power on 28 September,” it said.
EDF said it was confident that all of its trading activities were fully compliant with market rules in the UK. It added: “EDF Energy and EDF Trading can also say that they were not involved in the alleged activities on 28 September reported in the Guardian newspaper.”
A statement from Centrica said: “Centrica participates actively in the UK wholesale gas market in order to meet our commitments to our customers. We trade in the wholesale gas market every day. In this respect, 28 September 2012 was no different.
“We have reviewed all our trades executed around the close of the market on that day and have found nothing unusual about them or any cause for concern.”Unite, Britain’s biggest union, branded SSE’s profits “excessive” and blamed the government for failing to effectively control the industry.
Kevin Coyne, Unite national officer for energy, said: “These profits are excessive, especially when price increases have caused more hardship for those customers already struggling to get by.
“The government has washed its hands of all responsibility and left it to the market, which is clearly failing to deliver on price. This Tory government stubbornly refuses to properly regulate the energy industry.”
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