SSE loses 110,000 customers in three months as its price freeze fails to stop households deserting
- Supplier blamed 'very competitive market conditions' for the drop in customer accounts
- 370,000 customers deserted the supplier in the year to March
- SSE welcomes probe into the industry from the Competition and Markets Authority
- Households used less gas last year due to the mild weather, SSE reported
Energy supplier SSE lost as many as 110,000 customers in just three months, as its pledge to freeze prices failed to keep some households from deserting.
The UK’s second largest supplier blamed ‘very competitive market conditions’ for the drop in customer accounts, which fell from 9.10million to 8.99million in the three months to June.
The loss comes after 370,000 customers deserted the supplier in the year to March.
Changing balance: The number of households switching to a small supplier has increased every month for the past seven
The first drop in customer numbers prompted SSE to freeze prices in March until January 2016, after it had put up gas and electricity bills by 8.2 per cent last October.
The big six energy firms have all been under pressure in recent months from the rise in competitive deals from smaller energy suppliers.
The number of people moving to a small supplier has increased for seven consecutive months, according to Energy UK.
As many as 72 per cent of households would consider switching to a small supplier, according to research carried out by uSwitch earlier this year. The proportion marks a huge leap from the 56 per cent who would have considered an independent supplier when the same survey was carried out in 2013.
The big six energy suppliers have come under considerable fire for raising prices and now face a Competitions and Markets Authority probe to see if there are problems with competition in the UK energy market.
Provisional findings are expected in May or June next year.
SSE, which held its annual meeting today, said the investigation was an 'important opportunity to demonstrate the competitiveness of the energy market in Great Britain.'
Chief executive Alistair Phillips-Davies added: ‘We think the energy market is competitive and has brought significant benefits for customers. We also think we’ve done a lot in recent years to make it more transparent and easier to understand.
'That said, standards have fallen short in some areas and key features of the market have become politically contentious and subject to significant change designed to achieve a mixture of objectives.
‘With all of that going on, we think the CMA now looks like the best way of achieving a new, lasting settlement on the energy market that commands broad regulatory, political and public support.’
The Perth-based utility, which trades as Southern Electric, Swalec and Scottish Hydro, also revealed it had seen gas usage plunge 29 per cent and electricity fall 7 per cent due to milder weather.
Probe: The CMA has launched in investigation into the energy market, and is due to report its initial findings next year
But the business, which plans to cut 500 jobs, said its financial performance was on track as it looks to boost its dividend at a rate that at least keeps pace with the retail price index (RPI) measure of inflation for 2014-15. RPI inflation stands at 2.6 per cent.
The business said it was in the middle of selling PFI street-lighting contracts and non-regulated gas pipelines, which it is confident will complete by the autumn.
SSE has set out plans to spend £5.5billion on investment in the four years to March 2018, including £1.6billion in the current financial year.
Last week the group was granted planning permission to build a £1.2 billion undersea electricity cable linking green energy projects between Caithness and Moray in Scotland.
The energy supplier received the lowest proportion of complaints from customers of any of the big six firms , according to recent figures from Citizens Advice.
Complaints about energy giants Npower and Scottish Power almost doubled in the first three months of this year as billing problems left thousands of customers with incorrect or missing bills.
Npower remained ‘firmly at rock bottom’ in the complaints table, and Scottish Power fared little better in fifth place, after both introduced new billing systems.
However SSE attracted 34.1 complaints per 100,000 customers in the first quarter, followed by British Gas (75.4), E.On (83.6) and EDF (84.5).
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