Energy supplier SSE first to increase tariffs

Reuters

LONDON (Reuters) - Energy supplier SSE said on Thursday it would raise prices by an average 8.2 percent next month, triggering what is likely to be a political backlash against energy groups over the rising cost of living.

The company, the first of the "big six" suppliers to raise prices ahead of the winter, said it needed to increase prices because of the increasing cost of buying wholesale energy, paying to deliver it to customers' homes and government-imposed levies.

SSE said raising prices for gas and electricity was "the last thing the company wanted to do", and it pledged not to raise prices again before Autumn 2014 at the earliest.

"We're sorry we have to do this," Will Morris, group managing director retail, said.

"We've done as much as we could to keep prices down, but the reality is that buying wholesale energy in global markets, delivering it to customers' homes, and government-imposed levies collected through bills - endorsed by all the major parties - all cost more than they did last year."

The rising cost of gas and electricity bills has become a major issue in Britain since opposition Labour leader Ed Miliband promised last month to freeze energy prices for 20 months if his party wins power in May 2015, sending shares in the utilities sharply lower.

The move, which was broadly welcomed by the public, has sparked a wider debate about the high cost of living and which political party is best placed to help reduce it.

The result for the London-listed energy groups has been dramatic. SSE and fellow utility Centrica lost a combined 2.7 billion pounds in market value in two days after Miliband's announcement.

Energy minister Michael Fallon told Sky News he was disappointed with the announcement and urged customers to examine whether they could switch to a cheaper tariff.

(Reporting by Paul Sandle; editing by Kate Holton)

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