Britons face higher energy bills as SSE lifts tariffs

An electricity cable is plugged into the mains at a home in southern England January 6, 2008.

LONDON (Reuters) - Cash-strapped British households face much bigger energy bills this winter after utility SSE announced a tariff increase of nearly 10 percent it blamed on higher commodity prices, network costs and regulation.

The announcement, the first among Britain's six largest power suppliers, came only a week after the Bank of England warned that rising energy and food prices would risk lifting inflation in the coming months.

More than 8 million households face a 9-percent increase in prices for gas and electricity supplied by SSE from October 15, about a year after a rise of some 15 percent.

Other large utilities are expected to raise tariffs, adding to the burden on households already strapped by economic recession.

"We expect other suppliers to follow suit ahead of the peak winter period," said Tina Cook, analyst at Charles Stanley investment management company.

"Upward pressures on the cost of supply, which include non-commodity costs, make tariff increases necessary to protect supply margins in what remains a challenging operating environment."

Energy supplier E.ON promised not to raise tariffs until the end of the year, but Centrica, EDF Energy, RWE npower and Scottish Power are likely to make announcements on rate changes soon.

SSE said its customers on dual fuel deals paying by direct debit will fork out an extra 102 pounds per year from this winter, a rise it said was due to higher costs for distributing energy and government-imposed schemes and more expensive wholesale prices.

Around half of the cost of SSE's energy bills is determined by wholesale levels.

SSE, which said the price of gas has risen 14 percent since last winter, denied it was making excessive profit from its energy supply business.

Consumer advice group uSwitch urged customers to shop around for better deals and make use of energy efficiency offers that help reduce demand.

"Public service workers - many of whom have not had pay increases for nearly three years - may find that it is not just their pay that is frozen when they are struggling to heat their homes as a result of these outrageous increases," said Mike Jeram, head of business and environment at Unison trade union.

SSE promised not to increase prices again until the second half of 2013. It said tariffs would be reduced if possible.

The utility cut gas prices by 4.5 percent in March, after it had lifted the same prices by 18 percent and electricity prices by 11 percent in September 2011.

(Editing by David Cowell)