SCOTTISHPOWER has announced fuel bills will rise by 8.6 per cent – just a day after parent company Iberdrola warned it would be “forced” to raise prices in its UK business.
The firm said rises in wholesale energy costs, increased energy delivery charges and inflated costs supporting environmental schemes had left it no other option than to hike its bills.
The firm is the fourth of the Big Six energy firms to increase its prices – coming after SSE, British Gas and npower. Only E.ON and EDF have not yet announced a rise.
ScottishPower’s chief corporate officer, Keith Anderson, had on Wednesday told The Scotsman that prices would “undoubtedly” rise as a result of spiralling costs – claiming the increase would happen “before the end of the year”.
He was speaking after Bilbao-based Iberdrola announced a £23 million loss in the company’s UK retail and generation business for the first nine months of 2013.
“The cost of purchasing and delivering energy to homes across Britain has risen significantly this year,” said Neil Clitheroe, ScottishPower’s chief executive of energy retail and generation.
“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.”
He added: “We understand that these are difficult times for many families, and we have done what we can to hold our prices for as long as possible.”
The latest rise will add £113 a year to the average dual fuel bill – which will increase from £1,319 to £1,433 when the announcement comes into effect on 6 December.
Consumer groups said the latest rise would add further pressure to cash-strapped households.
“Unfortunately, the floodgates have opened and it looks like consumers are going to be buffeted by suppliers in very quick succession,” said Ann Robinson, director of consumer policy at uSwitch.com.
“The danger is that these hikes are sweeping households towards a cliff edge – when bills hit £1,500 a year this will be the tipping point where many will have no choice but to go without heating.”
Clare Francis, editor-in-chief at MoneySupermarket, added: “So far over the last week, 20.5 million households have been hit with bill increases from four of the Big Six energy companies and it’s only a matter of time before the remainder – EDF Energy and e.on – announce further increases.”
The increasing fuel prices prompted Prime Minister David Cameron on Wednesday to say he would “roll back” the green taxes to help cut energy bills.
He also said the energy giants will face an annual competition test.
“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,” said Which? executive director Richard Lloyd.
Elizabeth Gore, deputy director of fuel poverty charity Energy Action Scotland, said: “This move by ScottishPower is extremely disappointing but not unexpected. It seems that when one energy company puts its prices up, then others follow soon after and this pattern is becoming all too familiar to the public, who wonder if it is worthwhile to shop around.”
John Robertson, MP for Glasgow North West, who sits on Westminster’s energy committee, called for the government to force energy firms to separate their retail and generation arms.
“Only two more greedy companies are left to raise their prices, and sadly I am sure they will,” he said.
“The energy barons need to be split up, so they can’t force these eye-wateringly high price rises on helpless families.”