ScottishPower chief Galan hits out at Cameron over price controls
WESTMINSTER plans to force big power firms to offer their cheapest price plans to customers were branded anti-competitive by Ignacio Galan, chairman of ScottishPower parent firm Iberdrola, yesterday.
Defending ScottishPower’s recent 7 per cent average energy price rise by pointing out that the utility was losing money on its electricity generating and distribution business, he attacked Prime Minister David Cameron’s proposal to legislate to force prices down.
Galan was speaking in London as he unveiled Iberdrola’s group results.
Gross revenues for the first nine months of 2012 were €25.2 billion (£20.4bn), up 8 per cent on the same period last year, with pre-tax and interest earnings up 3.4 per cent to €5.8bn.
Operating profits dipped 2.4 per cent to €3.4bn.
Consumers and politicians have expressed anger at energy price rises just as winter starts to bite while power firms are reporting big profits.
But Galan said that ScottishPower had made a loss of £47.9 million so far this year, blaming a contribution of £94m that the company had to make to government energy efficiency programmes.
“Without this, we could cut our prices by 8 per cent,” he said.
He added that the question Cameron had to answer was: “Do you want a market, yes or no?”
The only way to achieve Cameron’s goal, on which the government has since rowed back, he said, “is to go to a regulated tariff, so no market”.
Galan said it would be like having to buy bread or petrol for which there was only one price.
Iberdrola’s forward investment programme for 2012-14, disclosed in some detail yesterday, revealed the importance of Britain and Scotland to the company’s future, with two-fifths of the group’s global investment programme being concentrated north of the Border.
Some £3.5bn is to be spent on upgrading electricity transmission and distribution systems including replacement of old electricity sub-stations and installation of new connections to homes in central Scotland. The money is also to be spent on increasing the capacity of the overland Scotland-England interconnector and building, with National Grid, a new subsea cable from Scotland’s west coast to north Wales.
“Transmission work will create 1,400 jobs of which 300 will be engineers and very highly qualified people,” added Galan.
“We are creating a centre located in Glasgow which started with 60-70 people and this month reached 260 people.”
Galan was quizzed about political developments including the prospect of independence referendums in the Basque country and Catalonia in Spain, where the company has a lot of operations, and in Scotland.
Asked if Scottish independence posed any problem for the company, he said: “I will not compromise myself by talking about things which have not happened.”
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Wednesday 19 June 2013
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