SSE today announced plans to freeze gas and electricity rates until 2016.
The supplier said it expects profits to fall as a result of the move and will be cutting 500 jobs and cancelling three windfarm developments in order to make annual savings of £100m.
SSE, which is the UK’s second largest energy supplier, also said it would split its retail and wholesale businesses by March 2015, in an attempt to increase transparency.
Labour’s energy twitter account welcomed the news: “6 months after @Ed_Miliband + @CarolineFlintMP announced Labour’s price freeze @SSE say they will freeze prices until 2016 #freezethatbill”.
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Government: Strategy to reduce energy bills is working
Energy Secretary, Ed Davey, was quick to back the supplier’s price freeze and said: “This will be welcome news for SSE’s customers and shows that the government’s work to reduce energy bills is working by lowering policy costs and driving competition.
“This shows that the big six are starting to realise they need to take big action if they want to keep their customers, who have been switching supplier in record numbers.”
uSwitch: A welcome u-turn
Director of Consumer Policy at uSwitch Ann Robinson said: ““This is a U-turn to be applauded. SSE was the last supplier to pass on the Government’s levy cuts and reduce customer bills this winter – now they are the first to freeze prices until 2016. We welcome this commitment.
“After another winter of rationing heating and hot water to cope with rising bills, SSE customers have at last been offered the peace of mind they desperately needed. It’s our hope that the remaining big five energy firms follow SSE’s lead and look at ways to offer consumers the same reassurance.”
SSE: ‘Responding to the questions that have been asked of us’
Alistair Phillips-Davies, Chief Executive of SSE, said: “With today’s announcements we’re recognising that delivering the lowest possible energy prices for our customers has to be central to everything we do.
“We’re responding to the questions that have been asked of us with a positive agenda for customers, including the longest ever unconditional energy price freeze. To help us achieve that, we’re making sure our own house is in order by streamlining and simplifying our business.
“In all of this, I hope that people will start to recognise SSE is not part of the problem but part of the solution.”