Energy Bills: SSE 'Looking Very Hard' At Cuts

A boss of 'Big Six' energy firm SSE (LSE: SSE.L - news) has told Sky News it is "looking very hard" at cuts to household bills as wholesale costs fall.

Will Morris was speaking as the group blamed warm weather for a 6.3% decline in half-year profits.

Profit before tax for the six months to 30 September was £317m.

The statement said: "In the UK, five of the six months were warmer by an average of about 1.3 degrees, relative to the 1981 to 2010 climate average.

"October 2014 was 1.6 degrees warmer than average and November 2014 is also forecast to be warmer than average."

The company also confirmed it had lost customers in the period as households shopped around amid a growing challenge from independent suppliers.

It said electricity and gas customer accounts Great Britain and Ireland (Other OTC: IRLD - news) fell from 9.1 million on 31 March 2014 to 8.89 million at the end of September.

SSE announced a price freeze from March into 2016 to give customers "peace of mind" on prices.

But falling wholesale costs since are yet to be passed on because firms buy their energy up to three years in advance.

Gas industry figures show a 25% drop in wholesale prices during the first six months of the year alone.

Mr Morris, who heads SSE's retail operation, said: "We've definitely seen some improvement which is why we're looking very hard now at trying to get prices down and we'll be the first to do that probably because SSE does act first."

His comments follow frustration with the industry over pricing among politicians though firms argue bills have been fair because they also reflect the urgent levels of investment needed to help keep the lights on amid warnings of low supply margins.

SSE's retail business swung back to profit in the period after making a loss in the same six months last year.

Lord Smith of Kelvin, Chairman of SSE, said: "SSE started this financial year expecting to deal with a number of challenging issues, and that has proved to be the case.

"Electricity market reform, the electricity distribution price control review and the energy market investigation are all taking place at the same time as the run up to the UK general election.

"SSE is taking a constructive approach to each of these issues, with the objective of meeting the needs of customers while safeguarding the interests of investors.

It expected earnings per share to be at the lower range of its previous expectations for the full-year.