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700,000 Homes Face Power Bill Hike for Second Time This Year 13.5- Per Cent Gas Charge Rise for SSE Customers

Posted on: Thursday, 10 November 2005, 06:00 CST

By DAMIEN HENDERSON

ANOTHER 700,000 Scottish households will see their gas bills soar 13.6-per cent this winter after Scottish and Southern Energy became the latest energy supplier to raise prices.

The announcement, in response to increasing global oil costs, was condemned by consumer groups and politicians, who said it would force thousands into fuel poverty.

Customers, mostly in the north of Scotland, also face price rises of 8.9-per cent and 12-per cent for electricity, adding an extra GBP36 a year to the average bill when introduced on January 1, 2006.

Average gas bills are expected to increase by GBP54 a year.

This follows a rise last month of up to 12-per cent for gas and up to 8-per cent for electricity for a million customers of ScottishPower, SSE's biggest rival. The firms account collectively for 70-per cent of Scotland's gas and electricity customers.

Yesterday's price rise is the second this year by Perth-based SSE, which announced profits of GBP714m in May.

Alistair Phillips-Davies, the company's energy supply director, said it had attempted to protect customers from the worst impacts of high volatile wholesale prices.

He said: "The pressure of high wholesale prices cannot, however, be withstood indefinitely and we have come to the point where these price rises are unavoidable."

Energywatch Scotland, the organisation which monitors the industry, advised customers to respond by switching to a supplier with cheaper rates.

Graham Kerr, spokesman for the watchdog, criticised SSE for not rewarding loyal customers. He said: "Four out of five electricity customers have stayed with SSE and the company has recently recognised this by bringing in noticeably lower price rises in its former monopoly area than elsewhere.

"This time there is a token 0.1-per cent between the rises . . .

which is very disappointing.

Customers have a right to expect better and the rise sees SSE move from being the second cheapest electricity supplier to be the most expensive."

Despite the criticism, Mr Kerr said: "Energywatch acknowledges that SSE has taken some steps to soften the impact on some of those consumers at risk of fuel poverty, however I am concerned that with so many consumers in the North of Scotland having no access to the gas network, the impact of these price rises will be considerable."

Customers on SSE's energyplus care tariff - introduced this year - will see the increases delayed until April 1 of next year. The supplier said it would write to 50,000 households identified as being at risk to advise them of the scheme, which could reduce bills by up to 30-per cent.

Richard Lochhead, SNP energy spokesman, described the announcement as "another blow for customers".

He said: "These increases, coming on the brink of what is expected to be the harshest winter for a decade, could not come at a worse time. It promises to get the new year off to a terrible start for lowincome households already struggling to pay fuel bills."

The North East Scotland MSP said many of his constituents would be worst affected: "Once again, consumers living in energy-rich Scotland are facing double-digit increases in their fuel bills."

SSE also announced a capped price offer for dual fuel customers paying bills by direct debit. Customers would pay a 4-per cent increase on the January 2006 electricity prices and 7-per cent on gas - both capped until February 2008.

Mr Phillips-Davies of SSE said of the global situation on fossil fuels: "There remains a fundamental concern about the causes of high and volatile gas prices and we have sympathy with the concerns expressed by Energywatch and others about the operation of the UK's gas market.

"It is not noted for its transparency or liquidity, and until progress is perceived on these issues, the risk of high and volatile prices remains - with customers feeling the impact directly with higher energy bills."

HOW THEY COMPARE

Annual household cost of electricity after SSE rise

Medium user

Scottish Hydro (SSE) GBP337

Scottish Gas GBP328

ScottishPower GBP321

Powergen GBP314

EDF energy GBP300

Npower GBP281 (price rise pending)

Source: Energywatch

Source: Herald, The; Glasgow (UK)

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