Call for cheaper Western Isles electricity prices 11/11/14
A social energy tariff needs to be introduced urgently to help people in the Western Isles combat a electricity bill surcharge, utility giant Scottish and Southern Energy (SSE) has been told.
Families in the north of Scotland have to pay an additional 2p per unit more than elsewhere as all electricity suppliers face different costs for transporting electricity across the grid in different parts of Great Britain.
It means households pay around 15% more than a family in Oban or Glasgow using the same amount of electricity.
Grid operator SSE is under pressure to reduce the surcharge as well as to launch a joint onslaught on energy regulator, Ofgem, to introduce a single nationwide price.
SSE representatives discussed the controversy with Western Isles Council and Western Isles Poverty Action Group in Stornoway.
Getting rid of the surcharge will take some time while island campaign groups want SSE to reduce bills now by reducing prices down.
The council said SSE should also take in a social tariff -
SSE representatives agreed to consider how a social tariff could be introduced which could reduce bills.
However, it requires the approval of regulator Ofgem and the onus falls on SSE to argue the case.
Western Isles council leader Angus Campbell said: “We made clear the dissatisfaction and anger of people in the islands that they are subject to an additional charge on their electricity, amounting to some 15% of the charges they pay.
“In an area with the highest levels of fuel poverty in the UK that is clearly unacceptable.
“The SSE representatives listened to the case we made and undertook to do further work on how a ‘social tariff’ could be introduced which could reduce bills.
“Whilst this would require the approval of OFGEM we made clear that we were of the view that SSE could reduce bills now if they were minded to.”
SSE says it wants the grid infrastructure transmission costs to be flattened out so that there is one standard charge for every customer across the country.
Ceasing the regional price differentials would mean the grid network companies would receive the same income for their necessary maintenance and investment work, but the costs would be spread across all regions.
Reforms require regulatory change and SSE said it is keen that this happens as soon as possible.
After the meeting, Greg Clarke of SSE said: “SSE have been campaigning for some time now to introduce national pricing which would alleviate the regional variances in price which currently exist in the Great Britain energy market.
“We’ve written to the Energy Secretary Ed Davey to make the case and we have also raised this through our response to the Competition and Market Authority’s investigation into the energy market.”
He stressed SSE will continue to argue for one single price which is “fairer and we will continue to make the case so customers in Benbecula, Bristol and Bradford, would pay the same price for their energy.”
Mr Clarke said the higher surcharge is due to regional variances North of Scotland region is approximately 25% of Great Britain’s land mass but there is only 740,000 customers to recover the costs from.”
He added: “Much of this network is extremely remote and, as a result, it simply costs
more to actually distribute electricity in this region and those costs are passed
through to energy customers regardless of who their supplier is. It is not just an
issue which affects SSE -
SSE’s argument is the anomaly should be addressed by “basically spreading all the different network costs across the Great Britain market, evenly across all customers, so you’ve got one price to supply energy regardless of who you are with.”
A single national price “would take some time to introduce and would require either the government or the regulator, Ofgem, to intervene.
Another option is for the Competition and Market Authority to propose the change to “simplify the market for customers.”