Belfast Telegraph

Tuesday 29 July 2014

ScottishPower hikes energy prices

ScottishPower has become the latest provider to announce gas and electricity price hikes

Another 2.2 million households face higher energy bills after ScottishPower became the latest provider to announce gas and electricity price hikes.

The group said it will raise gas tariffs by 8.5% and electricity prices by 9% on average from December 6, adding another £113 to the typical annual dual fuel bill.

Spanish parent firm Iberdrola warned in third-quarter results yesterday that it had "no option" but to increase tariffs in the UK after claiming ScottishPower had been hit by the Government's energy efficiency and environmental measures.

ScottishPower is the fourth of the "big six" suppliers to reveal energy price increases so far this month, following British Gas, SSE and npower.

Its bills blow also comes just days after ScottishPower agreed to fork out £8.5 million to customers following an investigation by regulator Ofgem, which uncovered mis-selling by its doorstep and telesales agents between 2009 and 2012.

ScottishPower said on average prices will rise by 8.6% across the board, but admitted customers in the South and South East will face average rises of 10.2%, while those in the Midlands will see tariffs increase by 9.3%.

Neil Clitheroe, ScottishPower's chief executive of energy retail and generation, said: "The cost of purchasing and delivering energy to homes across Britain has risen significantly this year.

"With an increase in costs for delivering compulsory schemes to reduce carbon emissions and improving energy efficiency in homes, we unfortunately have no other option than to pass these on by increasing our prices for customers."

Iberdrola yesterday said its UK retail and generation business suffered a £23 million operating loss in the first nine months of the year.

ScottishPower said more than a million of its 3.2 million residential customers will not be affected by the price rises, as they are on fixed or capped tariff deals.

It has customers across the UK, but is particularly strong in Glasgow, Edinburgh, Merseyside and North Wales.

Prime Minister David Cameron surprised MPs yesterday when he made an apparent U-turn on costly green levies, saying he would roll back some of the measures following mounting claims by providers that they are one of the main factors forcing up prices.

Environmental charges are thought to be driving up energy bills by an average of £112 per household a year.

ScottishPower said it has seen a 16% increase in the cost of environmental and social schemes.

But Energy Secretary Ed Davey slammed ScottishPower's move to raise prices.

He said: "It's surprising that these companies think they can keep getting away with bill hikes of this magnitude.

"As more and more people shop around for the competitive deals on the market, some of which are offered by the independents, companies like ScottishPower can no longer put their bills up in this way with no consequences."

Richard Lloyd, executive director of Which?, said: " The Prime Minister is right to carry out a review of competition in the energy market but that won't help cash-strapped consumers who are struggling this winter."

He added: "We need to break the stranglehold of the biggest energy companies by separating domestic supply from generation and the Government must make sure its own policies are not adding unnecessary costs to consumers' bills."

Bosses of Britain's big six energy firms have been summoned to appear before a committee of MPs on the Energy and Climate Change Select Committee next Tuesday to explain the recent price rises.

But some of the chief executives have snubbed the hearing, with Centrica-owned British Gas sending its managing director of energy, Ian Peters.

A Downing Street spokesman described the ScottishPower price rise as "disappointing" and said the Prime Minister would advise customers to shop around for the best value gas and electricity deals.

"The advice is to look at the market and see what is out there and whether there is a better deal that might be available to consumers," said the spokesman.

Scotland's Deputy First Minister Nicola Sturgeon said the hike was another blow to Scottish households, many of which were already struggling to pay their energy bills.

She said: "As we continue to stress, Ofgem, the UK Government and energy suppliers need to be held to account and must deliver a simpler, fairer, clearer and more competitive energy market to limit future price rises and increase transparency for consumers."

Scottish households concerned about their energy bills can seek advice on energy efficiency and find out what support they are eligible for by calling the Scottish Government Home Energy Scotland hotline on 0808 808 2282 or at www.homeenergyscotland.org.uk

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