ENERGY giant SSE has announced a £250million payout to shareholders – on the eve of price rises which will mean bigger bills for hundreds of thousands of customers in the north and north-east.
The firm – which owns the Scottish Hydro brand – will increase tariffs by 8.2% from tomorrow, claiming it is struggling to cope with rising costs.
But last night, it announced an inflation-busting 3.2% increase in dividends, meaning shareholders will share a quarter-of-a-billion-pound windfall.
The firm has dismissed accusations of greed, saying “nothing could be further from the truth”.
But last night, one of Scotland’s leading fuel poverty chiefs said the company was fast losing the trust of customers.
Tomorrow’s price rises will add £106 to SSE’s typical dual-fuel customer bill – pushing it up to £1,380 a year.
SSE bemoaned “difficult” energy market conditions as it announced a profits drop of more than 11% yesterday, but it still made £354million in the six months to September 30. It said its dividends were key to retaining the shareholders who fund much of the infrastructure customers need.
However, Energy Action Scotland said people should come first.
The charity’s deputy director, Elizabeth Gore, said: “We understand that commercial companies need to make profits.
“But with energy prices now having such a high profile, people’s trust in energy companies will undoubtedly be dented further by this move by SSE.
“People should not be pushed into fuel poverty while at the same time companies make large profits and put their prices up.
“The UK Government needs to take action to make sure the energy markets are fair and to stem this relentless rise in energy bills.”
Richard Lloyd, executive director of consumer group Which?, said: “Despite reporting losses on its domestic supply business, SSE as a group is in profit and awarded above-inflation dividend payments to shareholders.
“This will be of little comfort to their customers who were hit by an average price rise of 8.2%.”
Will Morris, group managing director of SSE’s retail business, said: “Some politicians and media commentators have claimed recently that we value our shareholders more than our customers.
“Or, to put it another way, we’re focused on paying them a dividend on their shares, regardless of what that means for our customers. Nothing could be further from the truth.”
He added: “Without the investment made by shareholders, we couldn’t afford to build the infrastructure or buy the equipment needed to deliver what customers need.” Labour wants to freeze energy bills if it wins the next election and its shadow energy minister, Tom Greatrex, said: “Just days before their price hike hits millions of households, these profits and the above-inflation rise in dividends to shareholders raise yet more questions about whether this market is really working for consumers.”
Rising gas and electricity bills have dominated the political agenda in recent weeks after five of the so-called “big six” suppliers – which includes SSE – upped their tariffs.
EDF Energy said on Wednesday that it was increasing prices by 3.9% in January, but this was far lower than many of its rivals, as the group said it would not pass on costs of government green levies in anticipation of changes to how these schemes are paid for.
SSE chief executive, Alistair Phillips-Davies, called yesterday for the levies to be paid for by general taxation, which he said would reduce bills by £110 immediately.
The group vowed to reduce its bills if the levies were cut, saying that prices would definitely come down as a result, “no ifs, no buts”.
Scottish Gas owner Centrica, which increased bills for customers in the north of Scotland more than anywhere else, will give a trading update today.
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