SSE has raised gas and electricity 8.2% - prompting energy minister Michael Fallon to urge customers to leave the utility provider.
The minister said that households should instead switch to another provider and that he was "disappointed" with 
SSE (SSE) for the proposed hike - which will affect 7.3 million customers and mean the average annual standard bill will rise from £1,354 to £1,465. According to Moneysupermarket.com the energy giant has increased prices by £227 over the past year.
"The best answer here is more competition. I would encourage customers to look at the tariffs they are on, and see if they can switch. That competition is best," Fallon said.
This will come as a blow to the listed company whose share price has fallen steadily since Ed Milliband announced plans to free energy prices. The share price peaked at £15.80 on September 24 and sits at £14.50 today.
The leader of the opposition last month promised households that he would freeze energy prices for 20 months if he won the next election. His announcement caused energy companies' share prices to drop and Merchants Trust fund manager Simon Gergel to warn there could be serious consequences should his plan come to fruition.
"When you invest in utilities, you always have to be aware of both the political risk factors and regulatory risk factors, and these come and go from time to time," he said.
"These specific policies may be quite difficult to implement because of European Union rules. The U.K. needs massive investment in energy infrastructure, in generating capacity, potentially nuclear energy, and companies are going to be very reluctant to invest with the prospect of price controls or tighter regulation. In the meantime, of course, share prices have already reacted and fallen."
Speaking about the SSE increase Gergel said that while the news was unwelcome it was not surprising due to an increase in operating costs.
"There are many costs increasing that are outside of SSE's control," he said. "Not only has the cost of wholesale energy increased, but also the cost of managing their networks and infrastructure as well as spending on developing new renewable energy projects."
Morningstar analyst Andrew Bischoff said that a price freeze could result in significant value impairment through lower investor returns for U.K. utilities such as SSE.
"The proposal also would replace Ofgem with a more powerful regulatory body, potentially jeopardizing the constructive regulatory environment that supports our earnings and dividend growth forecasts for SSE," he said.
Bischoff said the raise in gas and electricity prices were necessary for utilities, to pass through the increasing costs of electricity in the UK to be able for SSE to maintain its allowed return.
According to Dow Jones, SSE expects its annual profit margin in its energy supply business should average around 5% over the medium term. In 2012/2013, it was 4.2% and SSE expects to fail to meet this 5% target profit margin again in 2013/14.
SSE shares closed Wednesday at £14.54, valuing the company at £14.04 billion.
