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1 February 2007 - UK energy provider Scottish and Southern Energy (SSE) has written to its seven million domestic customers telling them that it will cut gas and electricity prices "within the next few months".
The company, which increased gas bill prices by 12.2 per cent less than a month ago, yesterday declined to say by how much it plans to reduce bills. The move, which is likely to trigger a wave of similar announcements across the sector, will result in the first reductions in domestic gas and electricity prices for six years.
SSE, which supplies energy as Southern Electric, SWALEC, Scottish Hydro Electric and Atlantic Electric and Gas, said it had made the decision in light of the sustained fall in wholesale prices since September. Each power company has been under huge pressure to reduce prices in the face of a halving of wholesale gas prices since April 2006.
On Tuesday rival Npower announced a price cut of 6 per cent - but only for new customers signing up for one of its online tariffs. British Gas has already said it will lower prices in the spring. A firm announcement is likely to come when the company presents its preliminary results to the City on 22 February.
Alistair Phillips-Davies, energy supply director of SSE, said: "Since last September, we have made clear our intention to cut gas and electricity prices if there was a sustained fall in wholesale prices which would allow us to do so, and I am very pleased that we have now been able to confirm this."
SSE picked up 1m new customers last year by offering some of the lowest prices in the UK. Yesterday's statement was the clearest indication yet that there are going to be price falls across the board.
Executives at the other power retailers usually wait to see the size of British Gas's price reduction before making an announcement.
The switching company uSwitch said yesterday that gas prices would have to fall by 24 per cent "by the end of year if consumers are to get the full benefit from wholesale price reductions".
Meanwhile, SSE will probably return prices to the level they were before the 1 January price hike.
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