"Thank you for your recent email about our price increase. I am sorry you have had cause to contact us in these circumstances and I hope that my explanation will go some way to restoring your faith in SSE.
It may help if I explain the background behind our price increase. There are 3 reasons why prices are changing.
Firstly, the cost of using the networks to get gas and electricity to customers' homes is 9% more expensive than it was this time last year. There are a number of mandatory environmental and social initiatives that suppliers are required to fund. These include subsidising energy efficiency measures and payment of the Warm Home Discount Rebate. Unfortunately, these are 30% higher than they were a year ago.
We also buy some of our energy up to several years in advance. This balanced and sensible approach has allowed us to protect our customers from the sharp peaks in wholesale prices over the last few years. The price we've paid is 14% higher than this time last year.
Whilst I note your comments about other suppliers' prices, I must advise that it is not our normal policy to comment on the charges of our competitors. We pride ourselves on the principles of our Building Trust campaign; fairness, transparency and simplicity.
We buy some of our energy requirement far in advance, some a few months ahead of delivery and the remainder is traded at the latest possible time. This technique ensures that we buy just the right amount of energy.
This balanced approach allows us to avoid sharp spikes in the cost of energy but still allows us to take advantage of any sustained drops in the forward price. It also allowed us to reduce our gas price in March
2012 and if the market conditions allow we will offer a reduction in our prices.
Although the short term price of energy may fluctuate over the coming months, our existing contracts enable us to promise no more increases until the second half of 2013 at the earliest.
Naturally we are disappointed to announce this increase. Raising prices is never an easy decision, particularly when the group has posted a strong set of trading results.
Nevertheless, we must be aware that our retail business saw a significant drop in profit last year and with rising costs set to impact our business we simply could not maintain our current prices. We have a responsibility to make a modest profit from energy supply."
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Note their normal policy to not comment on other suppliers' prices, yet the fact remains that Power NI are proposing a 14% *reduction* in electricity due to easement of gas and coal prices.