Winter woe for 2.5m homes as Scottish Power raises prices

Published on Friday 19 November 2010 16:36

Scottish Power has become the latest energy company to ramp up its prices, increasing bills for customers as winter starts to bite.

The firm said it was raising average gas prices by 2 per cent and electricity bills by 8.9 per cent, in a blow to 2.5 million households.

The new charges will come into effect from 25 November, adding around 54 to the average annual dual fuel energy bill.

The Scottish Power price increase follows a move last week by British Gas to increase gas and electricity tariffs by an average of 7 per cent.

Independent consumer watchdog Consumer Focus said the rises would "heap yet more fuel on to the fire of distrust that consumers feel towards energy suppliers".

Audrey Gallacher, head of energy at Consumer Focus, said: "Energy firms need to give answers on why customer prices have been cut by less than 10 per cent when wholesale costs have been so low for so long, yet suppliers are quick to hike prices as soon as wholesale costs start to creep up."

Scottish Power, which is owned by Spanish group Iberdrola, said its decision came after wholesale prices rose by 26 per cent per dual fuel customer since March, when it reduced prices.

But Consumer Focus said wholesale prices are still around half what they were at their peak in 2008, despite increases over the summer. Scottish Power was the last of the "big six" to reduce gas tariffs earlier this year after sharp falls in wholesale markets.

Its announcement makes it the third energy group to plan price rises, after British Gas last week and Scottish & Southern Energy (SSE) at the end of last month.

EDF Energy has guaranteed to freeze standard gas and electricity prices for residential customers at their current levels until at least the start of March 2011.

Consumer Focus said after the recent increases take effect, Scottish Power will be the most expensive of the major providers for dual fuel customers who pay on receipt of their bill.

It will be the third dearest for monthly direct debit customers after SSE and British Gas, according to the watchdog.

Ann Robinson, director of Consumer Policy at comparison website uSwitch.com, said: "Just like SSE and British Gas, Scottish Power will be hitting customers over the winter months when energy usage is at a peak. The increase may be moderate, but the timing is miserable. The fact is that seven out of ten people cut down or rationed their energy use last winter because of cost - winter price hikes will simply force even more down this route."

Raymond Jack, Scottish Power's director of energy retail, said: "We understand that times are difficult for many people, and we have done all that we can to keep energy prices as low as possible for as long as possible."