ENERGY firm SSE said profits from its domestic supply operation fell by 21% over the last year as it battled higher costs and falling consumption.

The division, which is the UK’s second biggest supplier with 9.5m household and business accounts under brands including Southern Electric, Swalec and Scottish Hydro, still made £271.7m in the year to March 31.

SSE said this amounted to an average of £30 per household and that its operating margin of 3.5% remained below its medium-term target of 5%.

It has been squeezed by rising wholesale costs – which make up about 50% of a typical dual fuel bill – and a delay in increasing bills until September.

There was also a slump in gas consumption due to the economic downturn and warm autumn.