SCOTLAND'S energy giant SSE has taken the high ground in the sector's ongoing battle with politicians and regulators, chairman Lord Smith has told shareholders.

But Lord Smith also told the annual meeting in Perth that SSE's two-year price freeze will not be at investors' expense.

He added the firm was "committed to achieving business success in a responsible way", hence its freeze on gas and electricity prices until ­January 2016

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"By that time our prices won't have gone up for more than two years - the longest ever unconditional price freeze since privatisation," he said. "It puts us in a good position to work constructively with politicians of all parties and competition authorities."

Lord Smith said SSE contributed over £9 billion annually to the UK's GDP and supported 110,000 jobs.

Its profits were "put to good use for the customers and communities it serves", and its plans to create a "simplified streamlined business" demonstrated its commitment to energy market reforms.

But he went on: "Foremost among our objectives is annual dividend growth that at least keeps pace with inflation, that is what we are working towards for shareholders."

Last January consumer groups seized on SSE's 3 per cent rise in the dividend two months after it increased prices by 8.2 per cent.

Lord Smith said SSE had previously cut prices in response to the government's easing of the so-called green levy.

But he added: "More needs to be done to find a fairer way of paying for social and environmental schemes."

In response to questions, Lord Smith said the debate over "keeping the lights on" in the UK, and the need for new generation capacity, had been the main subject for discussion at yesterday's SSE board meeting. But SSE's only active project is a gas-fired station in southern Ireland. Chief executive Alistair Phillips-Davies said that from a Scottish point of view its nuclear stations would not close for at least 10 years and meanwhile Scotland remained a net power exporter.

He said: "We are very happy to build new gas plants but we must get returns....Spending hundreds of millions of pounds on assets that aren't needed is something we have to be careful about given our current commitment to consumer prices."

Asked by shareholder John Williams about the industry's tarnished reputation with complaints at their highest ever level, Mr Phillips-Davies said SSE's complaints were at one-tenth of the level of the worst utility.

"Our record has been the best in the industry...we were the first company to end doorstep selling, the first to end cold-calling of people and we are the only major utility and the largest in the FTSE-100 to have a Living Wage policy."

Lord Smith added: "Since our statement that we were going to freeze prices and take seriously customer complaints, we have seen some serious recovery in the share price."

Shareholder Michael Gibson asked whether SSE was taking risks by committing to the price freeze. Mr Phillips-Davies said the company had "looked to its cost base".

SSE said in March that 500 jobs would go in a voluntary redundancy programme to save £100m a year.

Shareholder John Robertson said SSE should make an "orderly retreat" from its plan for the Strathy South wind farm in Sutherland, which was rejected by Highland council last month, rather than push ahead with a "very destructive project". Mr Phillips-Davies said SSE developed wind farms "in a sensible and sustainable way".

He told shareholder Dorothy Finlayson that wave and tidal power currently had a cost twice that of offshore wind and more than three times onshore wind.

Institutional shareholders including the Church of England represented by ­ethical researcher Matt Crossman of Rathbone Greenbank Investments were said to be "very appreciative" of SSE's engagement on sustainability issues, while Lord Smith said afterwards the vote of over 99 per cent in favour of the group's ­remuneration report was the highest he had ever seen.