SSE exec warns energy reforms will raise bills

Suzie Neuwirth
Energy secretary Ed Davey is pushing forward with reforms
An SSE executive yesterday warned that uncertainty over the government’s energy reforms could raise costs for customers.

Under the new Contracts for Dif­f­erence (CfDs) scheme, renewable energy generators will receive a guaranteed price for the electricity they sell, regardless of the market price.

When the market price is lower, suppliers such as SSE will have to top up the difference, which will be paid for by lev­ies on consumers’ energy bills.

Deirdre Powers, el­ec­tricity market re­v­iew (EMR) comm­ercial project director at the FTSE 100 energy giant, told a Westminster En­ergy, Environment & Transport Forum conference that CfDs created “a new pricing risk” for suppliers, as the government had not told them how much they had to pay. As such, firms would have to price that risk into retail tariffs, she said.

“The lack of long term certainty is a political issue… about whether energy suppliers or tax payers should bear increasing energy costs,” Alex Har­rison, energy lawyer at Hogan Lovells, told City A.M. “If governments tinker [in regulated markets] for short-term political reasons, there tends to be a price to pay and that may not be good policy or suit their long term politics.”

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