Energy firms grilled as Scots brace for further price hikes

The UK's biggest energy suppliers will be asked by MSPs to justify their prices today as new figures show that some Scottish households have seen energy bills soar by 30 per cent since last autumn.

ScottishPower recently unveiled 19 and 10 per cent rises in gas and electricity prices respectively, coming into force on 1 August.

And with other suppliers expected to follow suit over the coming weeks, pressure is mounting on the industry to explain the moves at a time when household finances are being squeezed.

ScottishPower's shock move pushed its average bill up by 16 per cent, according to Which?, the consumer group. It warned that Scottish households could be set for energy bills 26 per cent higher than last autumn, if other suppliers implement similar increases.

The figures emerge as the UK's six biggest energy suppliers - ScottishPower, Scottish & Southern Energy, E.ON, EDF, npower and British Gas - face the Scottish Parliament's economy, energy and tourism committee today.

Convener of the committee, Conservative MSP Gavin Brown, said: "The committee is obviously aware of the global energy market but is keen to hear the justification for price rises, whether other suppliers will follow suit and the reaction of the regulator, Ofgem.

"Equally, we want to hear about the impact these energy prices will have on households and businesses in Scotland."

ScottishPower may be subject to particular scrutiny after Ofgem launched an inquiry into the way in which the supplier presented its latest price increase.

Its customers in the north of Scotland will from August be paying bills 30 per cent higher than a year ago, the Which? research found, with an average bill of 1,229. And the average bill for ScottishPower customers in the south of Scotland will hit 1,200 once the latest changes take effect, 22 per cent above last autumn's average of 981.84.

The average energy bill in Scotland, based on typical usage, the supplier's cheapest standard dual fuel tariff and paying by direct debit, is now 1,073 a year, up from 977 last autumn.

But that comes after suppliers raised prices by an average of 5.6 per cent over the winter. Experts believe the current round of increases, started by ScottishPower in early June, could send prices up by 15 to 20 per cent. Centrica, owner of British Gas, yesterday indicated that its prices would go up in the next few weeks.

Julia Clarke, Which? campaigner in Scotland, said: "We know that energy bills are consumers' number one financial concern, with 87 per cent of people living in Scotland saying they are worried about the cost of their energy bill. The big six energy companies have failed to prove that price increases are fair, so we hope that the economy, energy and tourism committee uses this opportunity to press suppliers to justify price hikes. Only then will we know if customers are really getting a fair deal."It's estimated that one in three Scottish households are in fuel poverty, defined as spending 10 per cent or more of their income on fuel bills. But Scottish Government figures suggest that every 5 per cent rise in energy prices plunges up to 46,000 more households into fuel poverty.