Energy company behind price rise makes £1,500 profit a minute


Energy company SSE has announced this morning that it will raise electricity and gas prices by an average of 8.2 per cent from 15 November.

Fat catThe energy firm has said it “deeply regrets” having to put up prices, but has to do so for three reasons: the higher cost of buying wholesale energy, paying to deliver energy to customers’ homes, as well as government levies.

Looking through SSE’s company reports (p92), however, it seems there is another, quite different, reason SSE may be putting up prices.

Any guesses as to what it might be?

This year, the top three directors at SSE were due to see their pay double, with the highest paid director set to pocket a total pay packet of just under £2 million (1.9m) compared to £1.1 million in 2012.

The other two executive directors both earned £1.4 million this year compared to just short of £700,000 in 2012.

In fact, the more one looks into it the more one realises that the company has a track record of increasing prices while its directors put their snouts in the trough.

Earlier this year the Daily Record reported that Ian Marchant stepped down as chief executive of Scottish & Southern Energy with, as well as an £840,000 salary worth £1million with bonuses, a £9million pension pot. He also left with share options worth up to £4.8million.

For 2012, the company also announced profits of nearly £1,500 a minute.

More broadly, profits of the Big 6 energy companies have risen by 74 per cent since 2009, while prices have risen by 13 per cent. Centrica, the company that owns British Gas, saw adjusted operating profit rise by 9 per cent to £1.58bn for the six months of 2013 to 30 June.

Maybe I’m being a cynic, but perhaps there is a connection between the constant energy price rises and the bumper pay packets going to those at the top of our energy companies.

Recently Left Foot Forward looked at three reasons Ed Miliband must not cave in to fat cat energy bosses

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  • Selohesra

    Profit per minute is a bit of a naive approach to measuring performance – perhaps symptomatic of the Lefts general lack of understandinding about business. A small sole trader with no significant investment would indeed be doing very well with such profits but to a bigger organisation with lots of shareholder capital tied up it may be less significant. Evidence based blogging or just sensational headlines?

  • JR

    The energy price argument is stale and poorly reported – it is time for a real progressive response.

    ‘Profit’ is not a cash fund for executives – it needs to cover debt repayments and investment. This discussion about blanket costs to consumers is disingenuous and shallow.

    Ed Miliband’s announcement has wiped about £1.2bn and £1.8 billion off the market value of SSE and Centrica respectively over the last two weeks. This trend will continue and will undermine their ability to invest in the UK.

    Investment in new generation is needed – Government knows and Ed Miliband should do too. The Coalition likes to talk about their energy policy successes, but they have had no new ideas and are just implementing the policy that Miliband set in train whilst he was Secretary of State.

    I am hugely in favour of green policies to limit climate change and protect vulnerable customers. These essential social policy objectives have a cost and need investment.

    The real question for any right minded Labour thinking person is WHO pays – not what the general increases may be for all.

    If government wants to put these on bills, that is fine – but they need to make sure that increases only impact those who can pay. General taxation would be a much fairer approach.

  • Chris Kitcher

    The real question to be posed on a left wing site is “Why are energy companies not nationalised?”

    Security of energy supply, along with other essential services, is a vital part of securing a safe and fair society in which. This can only be achieved when such services are run on a nationalised basis. Lets hope Milliband continues with his push for a revival of some real socialism

  • Simonio

    You make a lot of sense. perhaps the 12 billion of the funding for lending scheme could have been a start in helping vulnerable people out rather thaninflating house prices yet again!

  • Simonio

    You make a lot of sense. perhaps the 12 billion of the funding for lending scheme could have been a start in helping vulnerable people out rather thaninflating house prices yet again!

  • Stephen Wigmore

    Don’t tell me how much profit they are making. What are they doing with it. Is that profit distributed to shareholders or is large amounts of that profit invested?

  • Stephen Wigmore

    Don’t tell me how much profit they are making. What are they doing with it. Is that profit distributed to shareholders or is large amounts of that profit invested?

  • Stephen Wigmore

    Don’t tell me how much profit they are making. What are they doing with it. Is that profit distributed to shareholders or is large amounts of that profit invested?

  • tanith

    ED will not cave in over this or the bedroom tax BELIEVE IT he means business

  • RJP

    Atlantic G & E is part of the above and just received a two page letter of waffle re this increase BUT the letter does NOT actually mention the % increase!! Spoke to them (they did a manual calculation) BUT also brought up the subject of the annual rebate received each year that has been done away. The paragraph within the letter on this subject make difficult reading! Having had to ‘pull dragons teeth’ I at last extracted the fact that not only are prices rising but due to recalculations I am loosing £50.00 per year of the rebate. THIS WILL AFFECT ALL ATLANTIC CUSTOMERS BUT the figure involved may be a little less or more than above. As they make great play on only making £2.00 profit per week per customer it seems they have found a method to make 26 weeks profit out of myself outside of the increase with out having to say anything. I guess I will vote with my feet.

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