SSE protecting its shareholders as well as customers

SSE has pledged to freeze household energy prices until January 2016. Photo: Andrew Milligan/PA Archive/Press Association Images

Last September Ed Miliband promised that a future Labour government would freeze gas and electricity prices through to 2017. SSE was quick to condemn. The boss, Alistair Phillips-Davies, declared the cap would lead to "unsustainable loss-making retail businesses".

Well, blow me down, this morning SSE has "done a Miliband" (well a mini one) promising to freeze bills for its eight million customers through to January 2016.

The promise does not extend to businesses and is twelve months shorter than Labour's pledge but the echoes are obvious.

Consumer groups are offering hearty congratulations - a spark of competition they say on the eve of a report by the regulator which will almost certainly to refer the whole industry for a full competition inquiry.

So was it the threat of being broken up that motivated SSE's announcement? It will have been on their minds but remember SSE has also been losing customers - 250,000 defections in nine months last year.

SSE says it's responding to the pain of rising bills. As the boss puts it: "I hope that people will start to recognise SSE is not part of the problem but part of the solution."

SSE has reduced its investment in two onshore wind farms it says are 'no longer financially viable'. Credit: Nick Ansell/PA Wire/Press Association Images

SSE estimates this act of generosity will cost it in the region of £100 million. What's interesting is that the company's share price this morning has gone up rather than down.

Read the detail and you realise that SSE is not only moving to protect energy bills it is also protecting its shareholders and their dividends going forward. SSE also says it expects to be more or less as profitable as ever.

Something's got to give, surely? Well something has - 500 jobs to cut costs and, unfortunately for the government and indirectly for us as well, investment.

Remember the government is relying on the private sector to deliver much of the new nuclear power station and wind farms that we need for a greener, more secure, more affordable energy future.

SSE will spend £1.6 billion this year but beyond that it will be investing less and projects are being shelved.

SSE has stopped its investment in four offshore wind projects which it says are "no longer financially viable". If this is the general direction of travel the government's energy plans are in trouble.

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