SSE warns of 'consequences' of price cap

Electricity pylons Image copyright PA

"Big six" energy company SSE has said that there are "challenges" ahead including the threat of a price cap in the next Parliament.

It has warned about the "unintended consequences" of a price cap on standard variable tariffs proposed by the Conservatives.

Some 70% of its 6.76 million UK domestic customer accounts could be affected by a cap, it said.

The company announced a 2.1% rise in adjusted pre-tax profits.

It made £1.5bn for the year to the end of March. Profit margin per dual fuel household customer - a key measure in the industry - was around 6.9% compared with 6.2% the previous year.

Dividend cover for the next financial year would be "within, but towards the bottom of the expected range of around 1.2 times to around 1.4 times", the company said, marking lower earnings per share compared with the previous year.

Regarding the proposed cap, SSE said it "would caution against potential unintended consequences of any proposed intervention in what is a rapidly changing and increasingly competitive market".

Industry figures have criticised the plan, saying it could lead to higher prices.

Prime Minister Theresa May said 17 million households would benefit by up to £100 from the cap on poor value standard variable tariffs.

SSE raised its electricity prices at the end of April by 14.9% for 2.8 million customers. With gas prices unchanged, the result was that a typical dual-fuel household would see its annual bill rise by 6.9%, or £73.

The number of SSE customers fell by 210,000 during the course of the last financial year, although the rate of decline has slowed.

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