HOUSEHOLDS will suffer a "domino effect" of rising energy prices after Scottish & Southern Energy (SSE) yesterday announced plans to raise electricity and gas prices by about 9%, campaigners have warned.

The Scottish firm said the move, which will add £100 a year to the average bill, was "unavoidable", but consumer groups warned its rivals will follow suit, leading to higher costs for already hard-pressed families over the coming months.

SSE will impose the rise from October, blaming rising wholesale energy prices and the cost of complying with Government legislation.

Scott Byron, energy expert at comparison website, said: "I expect a 'domino effect' in the market as the other members of the Big Six providers follow suit to hike prices." He advised customers to shop around for a better deal, saying they could save up to £300 by switching supplier.

Perth-based SSE's rises take the average dual-fuel customer's bill from £1172 to £1274 – £8.53 per month – and will affect five million electricity customers and 3.4 million gas customers.

It comes despite SSE making an operating profit of £271.7 mil-lion in its Energy Supply business last year, down 22% from £347.7m in the previous year. The company expects to make a pre-tax profit of £100 a year from each of its dual-fuel customers.

SSE, which also trades as Scottish Hydro, Southern Electric and Swalec, last increased gas prices by 18% and electricity tariffs by 11% in September 2011.

British Gas parent Centrica recently warned wholesale price rises may lead to higher bills this autumn.

Energy firms ScottishPower, SSE, British Gas, Npower, E.On, and EDF have already increased their energy prices by between 15% and 20% since November 2010.

Andrew Faulk, energy expert at Consumer Focus Scotland, called for greater transparency, adding: "This price rise will be a hard blow for consumers in Scotland in the current difficult economic climate.

"People will be worried about a run of price rises, but we see little evidence in the trends in wholesale prices or in the performance of companies, that would justify all suppliers following suit.

"It is vital the regulator con-tinues to scrutinise the market to make sure consumers are paying a fair price and profits are at acceptable levels. There is also still a need for much greater transparency across the wider supply chain. Without that, the considerable consumer distrust over pricing will continue."

SSE's move comes amid rising levels of fuel poverty in Scotland, with the Scottish Government estimating around one million households spend more than 10% of their incomes heating their homes.

SSE said it had seen a 14% increase year-on-year in the average price in the wholesale market to secure gas for the coming winter.

Chief executive Ian Marchant said: "In a time of economic difficulty, we have endeavoured to keep energy bills as low as possible. Unfortunately, the increases in costs we have seen since making this pledge can no longer be absorbed and mean we are unable to keep prices at their current levels beyond this autumn.

"We remain committed to offering a fair price for the energy we supply and providing a range of practical and financial support measures for those struggling to pay their bills."

Meanwhile, energy companies are to face new guidelines designed to prevent them deliberately generating too much electricity in a bid to gain millions of pounds in compensation.

In October, new measures will come into force to tighten up rules governing payments made to companies to switch their wind farms and power plants off when the system becomes too full.

The UK Government has said more than £600m has been paid out to companies, including ScottishPower and SSE, in payments known as "constraint costs" during the last five years.