Energy companies, perhaps more than most, tread a fine line in terms of keeping investors happy, while maintaining good relations with their customers.
SSE demonstrated this today, when it jumped to the top of the FTSE leaderboard on news that it will raise gas and electricity prices by 9% in October. Customers will be furious, we can be sure of that. It will make headlines in the papers and politicians will complain that the company is charging more at a time of economic hardship. But, SSE will argue, costs of regulation and the network costs are rising and investors want to see the company recoup them.
"After this change," it said in a statement, "SSE is committing to cap household energy prices at this level until at least the second half of 2013." Last summer, the company promised to freeze bills until October this year, following a public outcry against a round of double-digit price increases.
Dominic Nash at Liberum Capital estimates that the price hike in October will result in another £260m of revenues for Scottish & Southern, but he recognises the sensitive nature of the stock.
You've got to have fairly thick skin to be an investor in this. It will probably be on the front page of The Daily Mail tomorrow and you will get a lot of politicians jumping up and down. But, at the end of the day, if your costs are going up, you've got to pass them through.
