SSE has revealed that shareholder dividends will increase by 3.2%, just two days before hiking its gas and electricity prices.
Responding to accusations that the company was putting shareholders ahead of customers, Managing Director of Corporate Affairs Alan Young, said: “SSE is a good performer when it comes to paying dividends, but those dividends have got a purpose.”
“We want to make sure we are able to continue to attract the investment […] that is needed to make sure the UK has secure energy supplies for many years to come.”
SSE supplies gas and electricity to roughly 10 million customers across the UK.
SSE sees fall in profits
SSE yesterday justified higher energy prices as it announced a 12% fall in adjusted pre-tax profits between March and September 2013. Profits were £354m, down from £400m for the same period in 2012.
Asked about whether or not prices would fall if green obligations were partially removed from energy companies, Young said energy bills would be cut accordingly.
EDF, on the other hand, has pre-empted the government’s decision and has raised its energy prices by 3.9% – less than half than that of the other big six energy suppliers, including SSE. However, should the government decide not to remove green subsides, the French energy supplier has warned that bills could rise again.
Remainder of the big six expected to follow suit
SSE will tomorrow become the first of the big six energy companies to implement energy price rises. It will be followed by four more of the big six. Only E.ON has not announced a price hike but is widely expected to do so in the coming weeks.
Rising gas and electricity bills have seen the energy sector pushed to the forefront of the debate between the main political parties. Prime Minister David Cameron has decided to review green subsides in an attempt to reduce bills, whereas Labour leader Ed Miliband has pledged to freeze price for 20 months should he be elected.
The price rises have also damaged the public perception of energy companies and a recent survey found gas and electricity suppliers were amongst the least popular firms in the UK. Speaking on the issue to BBC Radio 4, Young acknowledged the issue of trust and said: “If we don’t have a decent relationship with customers we will lose the mandate to run the business.”