'˜Big six' energy firms SSE and ScottishPower shed customers

Energy supplier SSE has revealed it lost another 230,000 customer accounts as households continued to switch away from the 'big six' to smaller rivals.

ScottishPower and SSE are facing tough competition from smaller rivals. Picture: Andrew Milligan/PA
ScottishPower and SSE are facing tough competition from smaller rivals. Picture: Andrew Milligan/PA

The Perth-based group blamed a “highly competitive” market after total customer accounts in the UK and Ireland dropped to 7.77 million in its first quarter to the end of June, from 8 million a year earlier.

Meanwhile, Glasgow-based rival ScottishPower also said it expects “fierce” competition in the energy supply market to continue “for the foreseeable future” as it revealed a 76 per cent slump in profits at its generation and supply arm and lower customer numbers.

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ScottishPower, owned by Spain’s Iberdrola, said underlying profits at the division tumbled to £48.8 million for the first six months of 2017, down from £205.9m a year earlier, which it blamed on milder weather conditions.

Domestic power sales were down by about 7 per cent and domestic gas sales fell 8 per cent. ScottishPower’s thermal generation dropped by 40 per cent during the first half, due largely to the closure of Longannet power station in Fife.

ScottishPower ended the first half with about 5.3 million customer accounts, down from 5.4 million a year ago.

SSE, which raised dual fuel prices by 6.9 per cent on 28 April, said it also came under pressure in the first quarter as the warmer weather saw households use less gas and electricity.

The group said the average temperature in the UK over its first quarter was 0.9C warmer than a year earlier after Britons sweltered in the hottest June since 1976.

SSE chief executive Alistair Phillips-Davies said: “As expected, 2017/18 is presenting a number of complex challenges to manage.”

The UK government has watered down its election pledge to knock £100 off energy bills for households through a price cap, with regulator Ofgem instead consulting on a proposed “safeguard tariff” for vulnerable customers.

In its latest update, SSE said: “Competition should be at the heart of the retail energy market and in line with that promotes a range of tariffs, products and services.”

ScottishPower’s chief corporate officer, Keith Anderson, said: “We have seen fierce competition in the UK and we expect this to continue for the foreseeable future. Even with this backdrop, our customer numbers are stable and we have still retained more of our customers over the last five years than any other large supplier.

“We will continue to work hard to offer customers good-value products, and continue to lead the large suppliers in encouraging customers to move away from standard tariffs. Abolishing standard tariffs is more effective than any price cap in ensuring more customers are on the best value deals for them.”