SSE encouraged despite slip in customer numbers

25th Jul 2013 11:41

Scottish & Southern Energy owner SSE has reported an "encouraging start" to its financial year despite a slight drop in customer numbers. The FTSE 100 group's electricity and gas customer accounts shrank slightly in Great Britain and Ireland dipped very marginally from 9.47m to 9.46m during the three months to end-June as average energy consumption fizzled down slightly.On a weather-corrected basis, there was an underlying decline of 2.0% in average household electricity use but an increase of 0.3% in gas use.SSE also warned that proposed "radical" reforms from regulator Ofgem were likely to "add cost and complexity to energy suppliers' relationships with customers".The company warned that new reform proposals will not enable investment decisions for new generation facilities to be made and may create uncertainty about the viability of existing plant in the energy-only market.Nevertheless, new Chief Executive Alistair Phillips-Davies said the company was in a "good position" and the internal reforms that it had already taken meant it was in a "relatively good" position to implement the regulator's new licence conditions. SEE said it would invest an estimated £1.5bn across 2013 and 2014.Phillips-Davies was heartened by progress in the first quarter: "SSE's year has got off to an encouraging start, with a number of important issues, such as the dispute relating to the Greater Gabbard wind farm, being resolved and solid performance in operations and investments. SSE and joint venture partner RWE had disputed a claim from engineer Fluor about delays and cost increased at Greater Gabbard, about which an undisclosed resolution was reached in May. The new capacity helped total electricity output from renewable sources jump 32%. Although the group does not disclose quarterly numbers, Phillips-Davies said: "We are in a good position to focus on our key operational and investment priorities for the year, including achieving further improvements in standards of customer service and further additions through investment to the asset base of the company. "I am therefore confident that we will achieve our key financial goal for this year, and the years ahead, of an above-inflation increase in the dividend.""Shares in SSE were down 0.9% to 1,611.18p at 12:16 on Thursday.OH