The hike will take effect just days after SSE announced a half year operating loss of £89.4 million for its retail arm.
SEE announced the price increase just over one month ago and has promised not to raise prices again until autumn 2014, at the earliest.
The gas and electricity supplier partially blamed rises on higher wholesale costs, increased distribution charges and government-imposed subsidies.
SSE was the first of the big six energy companies to raise its prices this winter, however, four of the others have announced they will be doing the same.
E.ON has yet to announce a price rise of its own, but is widely expected to do so in the near future.
Average household energy bills
|Supplier||January 2004||Current bill size||New bill size*|
Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas on a standard dual fuel tariff, paying quarterly by cash and cheque, with bill sizes averaged across all regions. *This doesn’t factor in any potential reduction as a result of a future Government announcement regarding levies on energy bills.
Green levies to be cut from energy bills?
EDF, the latest of the big six to announce a price increase, has pre-empted the government’s Autumn Statement and anticipated that it will announce a reduction in green levies on energy bills. As a result the French supplier’s price hike is less than half (3.9%) of the average increases implemented by the other suppliers (9.1%).
It is estimated that a review of green subsidies could lead to energy bills decreased by £75 per year. This reduction would not compensate for the latest round of price hikes but would be welcome relief for hard pressed consumers.
‘Even more households will feel compelled to cut down on their energy usage’
Ann Robinson, director of consumer policy at uSwitch, said: “The cost of heating a home this winter is about to get higher and the burden of keeping on top of energy costs is about to get heavier. Consumers already struggling to balance their budgets will be left floundering in the wake of this latest round of energy price hikes.
“While the government may be about to lend a helping hand, by potentially removing some of the extra levies that appear on our bills, this is unlikely to go far enough to really resolve the fundamental issue of affordability. Bills will still be creeping upwards and even more households will feel compelled to cut down on their energy usage as a result.
‘Consumers must fight their own corner’
“This is why consumers must fight their own corner. They can’t control prices, but they can control the impact on their bill by ensuring that they are paying the lowest possible price for their energy. They can also give themselves a price freeze by signing up to a tariff that protects them from price increases for anything up to four winters. The fact is that there are still vast swathes of people sitting on old-fashioned and expensive standard tariffs paying far more for their energy than they need to. Moving to a more competitive deal could help them better afford to keep their homes warm this winter.
“And switching is only part of the picture – I would also urge householders to reduce the amount of energy they use – not by going cold in the winter, but by making their homes more energy efficient. It doesn’t have to cost money upfront – the Green Deal is there to give advice and support, as well as the finance for those who cannot afford it. These two steps are the best way to keep a lid on bills.”