When Labour leader Ed Miliband promised to freeze power prices back in September, the 'big six' energy companies were up in arms. Centrica's (CNA: 326p) then chairman Sir Roger Carr said the policy was, "potentially a recipe for economic ruin". While SSE (SSE: 1,528p) boss Alistair Phillips-Davies said it could lead to "unsustainable loss-making retail businesses". The truth, of course, is rather different.
Just six months later, SSE is freezing household energy prices until at least January 2016, and it is rumoured that British Gas owner Centrica will follow suit - we'll hear more in an update on 12 May. But why the change of heart, and what does it really mean for profits and ultimately the dividends that shareholders have come to rely upon?
Well, SSE claims its unexpected price freeze was due in no small part to government pledges to remove social and environmental charges from energy bills. Cost-cutting and efforts to secure energy supplies in wholesale markets helped, too. The group did, however, warn that there would be a financial hit, saying that "profit margin from supplying customers with electricity and gas will be lower than it has been previously".