Highlands and Islands Labour MSP, and Shadow Islands Minister, David Stewart, has been told by the Secretary of State for Energy, Ed Davey, that there is nothing stopping SSE from lowering energy charges to north customers now, without legislation being changed.
This is the latest in the row over SSE charging customers in the north more per unit of electricity due to the higher distribution costs across the north and north-east.
The matter was raised late last year after the Western Isles Poverty Action Group highlighted the fact that the extra two pence surcharge Highlands and Islands customers pay per unit results in north residents paying an average of £300 a year more than customers further south.
Mr Stewart and his colleague, Rhoda Grant, have been pursuing answers on this for some months.
The statement by the Secretary of State is in contrast to assertions by SSE and Ofgem who say a change in legislation is required to rid the north of this surcharge.
SSE say they have called for the distribution costs to be ‘flattened out’ to one standard charge for every customer across Great Britain however they state that only Government, the Regulator or the CMA can make this happen.
However in a letter from Ed Davey, Mr Stewart has been told: “Whilst I appreciate the argument for ‘flattening costs’, I am concerned that such a move would remove or weaken the ‘cost-reflective’ principle enshrined in our current approach to charging.
“The effect of this would weaken the local accountability of the network operator in enduring expenditure is fully justified, in turn weakening downward pressures on network costs overall.”
Mr Davey advises that his officials have held a discussion with SSE about its proposal and are to meet again shortly to discuss again.
Mr Davey goes on to state: “It is worth noting that we do not believe there is anything preventing SSE from deciding to flatten network costs across its own customer base if it so wished.”
David Stewart, said: “At the end of the day, not withstanding Ed Davey’s comments, it is within the power of this coalition government to end this anomaly. By the stroke of a pen they could be putting new legislation through parliament.”
Mr Stewart continued “The best way to reduce fuel poverty in the Highlands and Islands is to remove this 2p surcharge and I call on government to do this now.”
Mr Stewart’s colleague, Rhoda Grant, added: “This ConDem government promised to deal with this – they are now reneging on this promise. It is not good enough for their constituents in the Highlands and Islands.”