SSE share price falls as customers flee despite price freeze

Competition is still heating up in the energy market. That's bad news for the 'Big Six'.

by Rachel Savage
Last Updated: 24 Jul 2014

The populist bleating about large energy companies may have cooled down in the heat of summer, but the ‘Big Six’ are still feeling the pinch. SSE pledged to freeze prices until 2016 at the end of March. But that didn’t stop 110,000 customers leaving the UK’s second-largest home energy supplier in the three months to the end of June.

The company blamed ‘very competitive market conditions’ for the fall in electricity and gas accounts from 9.1 million to 8.99 million in the UK and Ireland (the majority of homes it serves have both electricity and gas, which means at least 55,000 households jumped ship).

SSE had already lost 370,000 accounts in the year to the end of March, having hiked prices 8.2% back in November. If that wasn’t enough, customers used 7% less electricity and 29% less gas in the mild weather in the quarter to the end of June, compared to the same period last year.  

Consumer groups have been calling on SSE and its fellow ‘Big Sixers’ (British Gas, Scottish Power, E.On, Npower and EDF) to go further in cutting household bills, to reflect falling wholesale prices. But SSE said when it froze prices it had bought more of its energy further in advance than usual, giving it little space to manouevre now.

The company said its 2014/15 earnings were on track to hit about the same level or a little more than last year and it was still planning to increase its dividend by at least as much as inflation. But investors were not entirely convinced and shares were down 1.3% in mid-morning trading. With the price freeze already shaving an estimated £100m per year of SSE’s profits, it can’t afford to keep shedding customers too.

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