MSE News: Energy firm's profit hike doesn't end price hike fears

SSE's CEO Ian Marchant has a responsibility to his shareholders to maximise profits.

Why would he want to reduce prices, and therefore profit, if he isn't forced to?

As long as he maintains market share, he won't reduce prices. The same can be said for all the other major suppliers. They are fully aware that if one reduces prices, they'll all be in a price war struggling to maintain market share which wont help any of them.
In fact what Ian Marchant has cleverly done here is announce to his competitors that should they wish to raise their prices, his company will follow suit thereby allowing them all to increase profits!

Unlike consumer goods, such as cars or washing machines where customers may change every 3-5 years to get a later model, and at that point will investigate the whole market and possibly change supplier as a result, utility suppliers face no such risk; customers wont switch supplier unless there is a real reason to do so e.g. lower prices or better customer service elsewhere.

The only companies that are causing any ripples at the moment in the status quo are the new entrants e.g. ovo, first utility, etc.. Their prices are competitive to try and attract customers, but they have no track record so customers are taking a flyer as to what their customer service will be like ... or even if they will still be around next year.
Consequently the few customers they may attract probably don't even register on the records of the big 6 suppliers market shares.

As I said, the only way prices will fall is if the suppliers are forced to reduce them. But no one will force them as the government believe prices should be set by the (competitive) market.

I'm by no means a Tesco apologist but that's a daft comparison and I'm sure (at least I hope) you actually know it is. The 'average' household would spend far more on their annual grocery bill than they would on their gas and electric. Surely it would be more helpful to look at the %tage of profit compared to turnover? It's a bit like your 'fuel prices are more expensive on the Continent' argument, TBH. Full of holes. Real big ones.

PS SSE don't actually have 9 million customers, they have 9 million accounts. A household which takes dual fuel would be classed as 2 accounts. And Tesco have waayyy more than 5 million customers, lol.

When prices increased sharply it was because energy prices were linked to the price of oil. When the oil price fell, the energy companies said that they bought upto a year in advance so prices would not fall until a sustained drop in oil prices. Later they said prices were not just about oil. 15 months later with sustained oil prices at half the levels in july 2008, we are now told, prices cannot be reduced due to predicted increases in wholesale prices.

Scottish and Southern Energy, which is the UK's second largest supplier and cut prices in the spring, blamed predicted increases in wholesale prices and higher costs linked to regulation for its decision to rule out further reductions in the near future.

Interesting to note that in Romania, where electricity consumption has fallen by 9% this year, many producers and distributors had requested price increases to counteract this.

... but at least Romania, unlike the UK, still has an energy regulator that can regulate, so no price increase there.

http://www.romaniantimes.at/news/Business/2009-11-11/4178/Energy_watchdog_may_keep_electricity_price_unchanged