SSE to cut energy prices by 6% from October 1, in line with UK price cap

Reuters
Updated

LONDON (Reuters) - Britain's SSE <SSE.L> will cut energy bills for customers on its standard tariff from Oct. 1, with prices falling 6% in line with regulator Ofgem's price cap, the company said on Wednesday.

The cap on default electricity and gas bills - a flagship policy of former British Prime Minister Theresa May to end what she called "rip-off" prices - came into force in January.

In August Ofgem said the cap would be lowered by 6% from Oct. 1 to 1,179 pounds per year for average energy use to reflect lower wholesale energy prices.

SSE said an average user on its standard tariff would pay 6% less, or 1,178.58 pounds a year, and those on pre-pay meters would pay an average of 1,216.90 pounds a year.

However, a small number of customers who use very little energy could see an increase in prices, SSE said, due to a change in the way the standard charge rates - the fees paid by all customers for access to the energy system - are calculated.

"All customers who are negatively impacted by the change will receive a letter/email to explain how the Ofgem cap works and why we’re changing our prices," SSE said.

Britain's Competition and Markets Authority said earlier this year that the way standard charges are calculated should better reflect costs for suppliers.

Britain's other five big six energy providers - E.ON <EONGn.DE>, Centrica's <CNA.L> British Gas, Iberdrola's <IBE.MC> Scottish Power, Innogy's <IGY.DE> npower and EDF's <EDF.PA> EDF Energy - are all expected to make similar price cut announcements ahead of the Oct. 1 deadline.

(Reporting by Susanna Twidale in London and Muvija M in Bengaluru; Editing by David Evans and Jan Harvey)